actually it's it's remarkable just how
much energy is involved in in doing
these calculations associated with
bitcoin mining
the way that it's approached right
across the internet is
for a number of years has been well
let's look at well how many hash
attempts are being taken how many
you know what's the what's the the rate
of actually attempting to crack this
code if we're going to put it in that
context uh versus what's the sort of
energy cost in terms of the efficiency
of the hardware that's being used to
solve this that's one aspect of the
puzzle a better way of doing it and
which is described in this rather good
paper which i'm sure sean will link to
below is to look at the economics but
for me from a physicist's perspective
it's really quite neat in many ways from
many perspectives it's what's called a
fermi problem so fermi problem the
physicist fermi was really adept
at working out
reasonable estimates for quantities a
really good example is
just here's a raw question how many and
this was the first sort of or the
archetypal fermi problem how many piano
tuners are there in chicago or we could
do that how many piano tuners are there
in nottingham
so you got to think about well first of
all you get hit by them i don't know how
am i ever going to answer that let's
look at estimates so
let's think about right what's the
population how many people do you have
per house you know let's see probably
listen or nothing let's do it for
nothing say three hundred thousand how
many do you have per house say two or
three somewhere like that maybe two and
a half kids but let's go with two just
as an example so many what fraction of
households would have a piano don't know
five percent then we'd have to think
about uh how often does our piano need
to be tuned i don't know once a year
maybe let's say once a year you take up
all these and you stack them up and you
it's just piled upon estimate but what's
remarkable is that you can get a pretty
good estimate in many cases obviously
each one of those estimates has got its
own error value and its own certainty
but sometimes what we want to do is get
you know calculate to the nth decimal
place other times we just want those
estimates and when you're coming back to
the bitcoin issue and the energy
consumption issue so when you look
across the web you'll find many many
different estimates and it's effectively
affirming probably because nobody really
knows nobody really knows no unless you
can take each piece of equipment or each
piece of hardware and say you know
somebody could be running the absolute
state-of-the-art kit and then somebody
could have a farmer playstations we're
not going to get a very you know
an estimate that's accurate to the nth
decimal place but we can at least think
about well could we put a lower limit on
this well let's think about you know
absolute state of the art and let's
think about the energy efficiency of the
absolute state of the art this paper is
quite useful because we turn to table
one we find right at the top and i'm
sure many in the audience will be much
more familiar with this than i am this
this equipment antminer s9 hash rate of
14 tera hashes per second so terror 10
to the 12. we find that the power
efficiency so the joules per giga hash
so the amount of energy that's chewed up
a giga hash which means a total of 10 to
the nine hash calculations per second is
of the order of
.098 joules per gigahertz it's a very
recent paper but what you can see is the
um the power efficiency so we need to
think about well how many actual
operations how many attempts hash
attempts are happening per second
and it is an absolute
astronomical number literally
astronomical it's 2.6
by 10 to the 18 per second
that's what's have you know that that's
the number of hash um attempts that are
happening uh across the entire sort of
bitcoin ecosystem if you want to put it
um which is a remarkable but it is truly
astronomical because the number of
galaxies in the observable universe is
only of order 10 to the 9 so this is 10
to the 9 by 10 to the 9 that number
that's a just a mind-bogglingly
astronomical number so it's 10 to the
18. so that's 10 to the 9 gigahash let's
put it that way
so that means what we have to do is to
is we need to take this number this
point zero nine eight and multiply it by
the two point six by ten to the nine we
work that out it turns out that we are
talking about two point 2.6
gigawatts of power so i've just
translated there from power to energy
remember power is the rate of doing work
which is the rate of energy expenditure
effectively which is different from
energy we'll come back and think of
energy in a second so it's the
difference between for example kilowatts
power and kilowatt hours energy but you
work it out and it turns out to be two
point off the order 2.6 gigawatts adding
on lots of other decimal places
pointless because of the estimates that
we've used in there in fact you could
make an argument that even having one
decimal place under this circumstance is
probably pushing it because we have sown
this this is just really we're thinking
about a lower limit we do not know
actually obviously all machines involved
in bitcoin mining are not of this
specification we also haven't bundled in
for example the costs associated with
cooling we haven't bought in and this is
this is purely the efficiency we haven't
bundled in um costs to sorted
actually with making the devices as well
so there are capital costs and there are
usage costs etc so it really is it's a
physics problem but it's also a coupled
physics and economic problem one of the
first papers that got a lot of attention
that looked into this was from some
researchers in ireland back in 2014
2.6 gigawatts is not that far removed
from the 3.1 gigawatts um of that
ireland uses
which is uh given my accent is fairly
close to home close to my heart
and it's now there's a website called
digi-economist where you can look up the
the current energy consumption and all
the values associated with with bitcoin
mining and we're now we've gone beyond
ireland and we're now up i think it
exceeds the czech republic's
consumption
so
and it's it's going up it's steadily
going up so if you go to that digi
economist website which i thoroughly
recommend there are many items
associated but one of those items is the
the um
the cost per transaction basically in
terms of the energy cost in terms of
kilowatts per hour
and it turns out that it's off the order
of per transaction of a thousand
kilowatts per hour it's difficult to put
that in sort of context sometimes but
that's an awful lot of energy when you
you total it up in terms of cost per
kilowatt hour
in the uk that's something like
uh it fluctuates obviously but it's
something like 14 pence per kilowatt
hour in the u.s something like 12. in
fact this paper produces much smaller
estimates in terms of its averages
talking about maybe five cents per
kilowatt hour anyway we're talking about
orders of magnitude it's fermi problem
again
and you add that up and you compare
14 pence per kilowatt hour times a
thousand kilowatt hours there's a
question then a cooling if you've got
massive farms you've obviously got out
in the financial cost of keeping them
cool
you've got i guess that you know the bar
goes up and up and up and up and up in
terms of the computational um power you
need to processes and it's built into
the system to have this sort of arms
race in terms of building up the
complexity so you got to build that in
you got to keep your kit um up to date
but you add that all in still at the
moment the pure economics of this or is
that we haven't hit the ceiling that 2.6
gigawatts is definitely not the ceiling
there's an awful lot more in terms of
where the the energy is going to upscale
i just got to stress um though remember
these are all estimates that's that
would we're coming back to that fermi
problem idea that's what we're doing you
might say we're plucking values out of
the thin air we're not you know they're
obviously informed values but it makes
me smile when i see you know people
quoting these values to three and four
decimal places when the error bar is
like that and they're quoting with a
precision like that the interesting
thing of course is this is considering
the whole system on aggregate for the
individual perspective as it were for
the individual minor is there's a hell
of a lot of risk or there can be a hell
of a lot of risk involved
and you've got to you know depends on
how brave you are i guess financially
whether you want to take that risk
so this is how bitcoin mining works
right in brief so we have a block and at
the top of the block is the hash of the
previous block and a number right which
we're going to call our nonce it's the
number we're making up let's