Energy and the Information Infrastructure: Part 1 – Bitcoins and Behemoth Datacenters

RealClearEnergy September 19, 2018

Energy & EnvironmentTechnology / Infrastructure

A note about this series:

It has been said that data is the new oil. Both domains are critical to society, entailing massive infrastructures and globe-spanning businesses. Of course one produces energy, while the other uses it. It may seem inconceivable that a single smartphone is responsible for as much electricity demand as a refrigerator, but that’s what the physics dictates. This series explores the energy realities ‘buried’ in the hardware in our age of ubiquitous computing and communications.

Information has an energy cost. Even the Pony Express had real-world energy costs; every horse along its iconic 1,900-mile network of stations consumed biofuel equivalent to 100 gallons of oil annually. The Pony Express achieved a record-setting ability to move mail in just 10 days over such a vast distance. That translates, in today’s terms, to about a 1 kilobyte per second data rate.

It’s not news that electricity now enables a billion-fold higher data rate propelling an infinitely vaster volume of information on hundreds of millions of miles of fiber and wireless networks. But it took Satoshi Nakamoto, the pseudonymous bitcoin founder, to bring global attention to the scale of the ‘hidden’ energy costs of processing and moving data.

Creating bitcoins, i.e., a virtual currency, requires physical warehouses full of compute power in order to solve complex equations. Those microprocessors expend roughly as much energy to create a single bitcoin as the energy needed to mine a single ounce of gold. (Or in Pony Express terms, about one-horse-month’s worth of energy per bitcoin.)

Continue reading the entire piece here at RealClearEnergy


Mark P. Mills is a senior fellow at the Manhattan Institute and a faculty fellow at Northwestern University’s McCormick School of Engineering. In 2016, he was named “Energy Writer of the Year” by the American Energy Society. Follow him on Twitter here.

This article is republished with permission from our friends at the Manhattan Institute for Policy Research.