Disgruntled Maltese crypto-miner learns price of Bitcoin is hefty electricity bill
Consumer tribunal awards crypto-miner €2,000 after discovering his road to riches is paved with galling electricity bill.
The retailer of a Bitcoin
mining machine – a high-powered computer designed to generate cryptocurrency – was ordered to refund €2,000 to a client who found his machine was consuming way too much energy for his liking.
The client, who filed a complaint to the Consumer Claims Tribunal, soon learnt the high price of mining for Bitcoins after purchasing one of the machines sold by Dario Azzopardi of IT company 3 Group.
The consumer – hoping to make a good deal out of mining for Bitcoin – insisted that the €2,600 working the machine made a lot of noise and that it consumed so much electricity that using the machine meant spending more money on electricity than the value of the bitcoins made.
When Bitcoin was first released in 2009, producing, or ‘mining’, the cryptocurrency was far easier. Simply using the processor of a regular home computer was enough to solve the complex mathematical puzzles needed to mine an entire Bitcoin.
As thousands more started mining, the difficulty of the puzzles started to increase, which meant miners had to start relying on dedicated, always-on computers specifically designed to solve the complex problems.
Indeed, while this disgruntled client was awarded his money simply because Azzopardi failed to contest the claim, the case reveals the notorious appetite for electricity of cryptocurrencies.
Various websites are tracking the annual carbon dioxide emissions from the bitcoin network, some as as high as 22.9 million metric tons or 0.2 percent of global electricity use.
Even though Bitcoin is not a physical product, the computers that run the network are energy-hungry.
According to the bitcoin energy consumption tracker at Digiconomist, bitcoin currently consumes 66.7 terawatt-hours per year. That’s comparable to the total energy consumption of the Czech Republic, a country of 10.6 million people.
Since no central bank governs the currency,
crypto-currencies are distributed through the public ledger spread across thousands of computers that is known as blockchain. In this system, every bitcoin transaction is tracked in a public ledger spread across all these computers.
This makes it difficult to reconcile and verify every single instance of digital currency changing hands. Verifying these ‘blocks’ requires finding a cryptographic key, a difficult computing problem. The people, or miners, who verify these transactions are awarded bitcoins, currently worth some $15,000 – making bitcoin mining a lucrative business.
However, not every miner is successful. The calculations needed to verify a block of transactions are getting more and more complex. And according to some estimates, up to 80 percent of bitcoin mining revenue goes straight back into paying for electricity.