One single Bitcoin transaction is equal to nearly two months of household electricity

JUST one Bitcoin transaction uses the same amount of electricity as a British household for nearly two months, figures have shown.

The amount of energy needed to run the cryptocurrency has soared to record annual highs of 77.78terawatt hours – the same as the entire electrical consumption of Chile.

The carbon footprint of a single transaction is the same as 782,718 Visa transactions or spending 52,181 hours watching YouTube, according to calculations by Alex de Vries, a blockchain specialist, at PWC.

“People react with disbelief, but the figures are true,” said Mr de Vries who founded the Digiconomist blog.

The energy footprint of the currency was noted several years ago, but when the Bitcoin bubble burst in 2018, sending prices tumbling from a high of almost $20,000 (£14,800) at the end of 2017 to below $4,000, consumption has only recently started soaring again.

The problem lies in the practice of Bitcoin “mining”. Cryptocurrencies work through blockchain, a technology that creates a communal ledger of transactions that is held by everyone, rather than being kept in a centralised database, such as a bank server.

A blockchain ledger cannot be altered without everyone knowing, so it prevents fraud, but to make sure the virtual currency is only spent once, users can offer to verify the transactions, for which they are paid in Bitcoin, a process called “mining”.

Available revenue for verification stands at around £4.6billion a year. But the “mining” process is energy-intensive, involving rigs of custom-built computers that calculate numbers in the hope of finding a specific one that allows it to confirm the deals, and create a new “block” in the blockchain.

There are around four billion computer rigs worldwide crunching numbers, yet 98 per cent of them never get the number first, and so will never verify the transactions.

Mr de Vries added: “They are sort of participating in a massive lottery and every 10 minutes one gets lucky and gets to produce the next block.

“The shocking thing is the average lifetime of a bitcoin mining machine is one and a half years, because we have a new generation of machines which are better at doing these calculations.

“That means it’s impossible for 98 per cent of the devices to make the calculation that actually results in a reward. So the rest are just running pointlessly for a few years, using up energy, and producing heat, and then they will just get trashed because they can’t be repurposed. It’s insane.”