from a new research conducted by Arcane Research, Bitcoin has the potential to become a major energy consumer. For this, the price should be several million dollars.
Bitcoin energy consumption depends on several factors
The study estimates Bitcoin’s energy consumption by the year 2040 and its report is written by Arcane Research analyst Jaran Mellerud.
According to the analyst, Bitcoin’s future energy consumption is heavily dependent on a number of things, such as the price of the digital assets, transaction costs and electricity prices.
If BTC reaches $2 million by 2040, its network could use 894 Terawatt hours (TWh) per year. This is about 10 times more than what is currently consumed on the BTC network. Yet, despite this massive growth, such energy consumption would make up just 0.36% of estimated global energy consumption by 2040, up from Bitcoin’s current 0.05% share, the analyst estimates.
Power consumption varies by price
Currently Bitcoin miners spend roughly 50% of their income on electricity. Bitcoin’s future energy consumption would be much lower in percentage terms in less bullish scenarios. The BTC price should reach $500,000 by 2040 for Bitcoin to consume 223 TWh per year. If Bitcoin trades for $100,000 in 17 years, BTC mining would consume just 45 TWh per year, the report said.
The significant impact of the Bitcoin halving was further emphasized. This is a four-yearly event that involves a 50% reduction in miners’ block reward. According to the report, the BTC price should rise at a tremendous pace as a result of the halving, while the mitigating effect of the halving could be offset by higher transaction costs in the future.
“Such an increase will only happen if there is significant demand for using Bitcoin as a payment system,” wrote Mellerud, adding at the end:
“The Bitcoin price depends on the market demand for Bitcoin as a store of value, while the transaction costs are determined by the use of Bitcoin as a medium of exchange.”