- Bitcoin mining could use more electricity in 2018 than Argentina, Morgan Stanley said in a note to clients Wednesday. It could also use more energy than electric vehicle power demand in 2025.
- The cryptocurrency could make up 0.6% of the world’s consumption in 2018 and force utility stocks to adapt.
Energy needed to mine bitcoin could be more than is used by the entire country of Argentina in 2018, Morgan Stanley said in a note to clients Wednesday.
“We project this consumption to be greater in 2018 than Electric Vehicle power demand in 2025, yet this level is still far from being material to utility power demand” analysts at the bank said. “Will this and other blockchain technologies become increasingly more important over time (and push thoughts away from Electric Vehicles? Potentially, but we would expect these new technologies to take time to develop.”
The bank estimates power for bitcoin mining, which has already been estimated to use more than 159 countries in 2017, will make up 0.6% of global demand, which is “not likely” to have any impact on utility stocks just yet.
“To successfully mine a coin (add to the blockchain ledger) requires a large amount of computational and therefore energy use, given the “proof of work” system that this deploys,” the bank said. “This is 0.2% of the world’s consumption currently. According to blockchain.info, Bitcoin accounts for c.62% of the cryptocurrency market,and so the total energy usage for cryptocurrencies is therefore likely higher than this.”
Bitcoin miners have already flocked to areas of the world where electricity and labor are cheap, like China and South Korea, but the bank warns that this could be impacted by regulation, much like has happened in South Korea this week.