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Cryptocurrency mining is still on the rise despite huge price drops

The value of bitcoin and other cryptocurrencies has plummeted in holocene weeks, but the calculator power devoted to the industry continues to rise Cryptocurrency coins

Artist’s impression of physical cryptocurrency coins

Marc Bruxelle/Alamy

Cryptocurrency mine continues to consume increasing amounts of computer power, despite a ball-shaped drop in prices making it a less attractive economic proposition .
Miners of currencies such as bitcoin and Ethereum are rewarded with cryptocurrency which fluctuates in measure compared with traditional currencies, so although mine costs may be predictable, income varies. On 8 November last year, the price of bitcoin was above £50,000, while on 15 May this year, it was slenderly less than half that at £24,244. Ethereum has dropped from £3567 to £1647 over the same time period .
Despite these falls, miners seem bouncy. They obtain cryptocurrency by performing intensive computing operations. The sum hashrate of the bitcoin network, which is a measured tracking the come of computer ability devoted to mine, continues to hit all-time highs. The latest datum from the Cambridge Centre for Alternative Finance ( CCAF ) shows that it reached 248 exahashes per second gear in February, while more recent data indicates that it has continued rising in the intervening months. Ethereum miners have besides proven bouncy to the dribble in prices. On 15 May the Ethereum hashrate sat at 1103 terahashes per moment, according to data from YCharts, while a year before the pace was fair 613 terahashes.


An increase in hashrate raises concerns about the carbon footprint of the cryptocurrency sector, as more intense calculation broadly requires more electricity use. This is likely to be offset by a switch to more efficient computing hardware, says Alexander Neumueller at the CCAF.   Its latest model estimates that the current annual electricity consumption of bitcoin is 141 terawatt-hours, comparable with the amount used by Egypt .
“ Without doubt, the network hashrate is an crucial variable star, but the answer to this question is much more complex. How sustainably the electricity used by bitcoin miners was generated, and the efficiency of the hardware besides play a decisive function, ” says Neumueller. “ We assume in our model that miners are intellectual economic agents – in other words, they alone operate profitable hardware. consequently, as profitableness decreases, older, less-efficient hardware is assumed to be switched off. ”
Along with holocene price drops, the cryptocurrency sector is still wrestling with the impact of a chinese ban on cryptocurrency mining that came into military unit concluding May. The CCAF says in a web log post nowadays that the prohibition has worsened, quite than improved, cryptocurrency ’ south environmental footprint, as miners have sought cheaper, but not inevitably green, energy elsewhere.

Artist Kyle McDonald, who uses cryptocurrencies in his shape and has previously published inquiry on the energy use of Ethereum, says that a reduction in the price of a coin should lead to a reduction in mine, but that this can happen over longer timescales. “ right field nowadays, despite the dip in price, we ’ ra not seeing any unusual dim in hashrate, ” he says. “ There is a slender downward drift right field now in bitcoin, but not outside of common unevenness. In another week we may be able to see if miners are systematically turning off some of their rigs, which would indicate that they are operating on narrow-minded profit margins. ”
And there are anecdotic signs that an Ethereum slowdown could besides be on the manner. One Ethereum miner based in Australia, who gave his name as Josh Ward, told New Scientist that the economics of mining were less attractive now that the price had dropped. “ The drop in profits is disappoint, ” he says. “ It ’ south made me reconsider how I view the opportunity cost of mine. On an individual horizontal surface there are quite a few people backing out of mine and selling their rigs due to the market crashes. ”
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