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My dad invested his pension but he’s too ill to handle it any more – what can we do? Can I get broadband without a landline? Report warns mining will be 0. In recent months, the bitcoin explosion has seen scrutiny from different sources, including environmentalists. Concerns have been raised over the amount of electricity needed to mine bitcoin. There have been some shocking estimates. 1,000 it started the year at, Digiconomist estimated the power usage consumed to run the cryptocurrency was higher than the entire Republic of Ireland.
Since then, with the digital currency seeing its popularity surging, the strain on the energy network has increased. 2 per cent of global consumption. Consumption is estimated to have almost doubled in the last three months and more than quadrupled in less than a year, leaving environmentalists worried over the impact it is having. Luckily, it’s nowhere near there now but that frightening prospect and potential environmental disaster waiting to happen highlights why some are willing to burn through energy to mine the coins. Now, one expert is warning that those mining bitcoin from the comfort of their own homes in Britain could be paying over the odds on their energy bills.
But if the bitcoin miners are more savvy, he also believes they could be exploiting legislation designed to protect vulnerable customers by offering them lower energy bills. Joe Malinowski, founder of comparison website The Energy Shop, said: ‘If you are mining bitcoin, or planning to, you are going to need electricity and lots of it. Being on the right tariff is therefore critical otherwise you could be spending hundreds if not thousands over the odds. No point making money on the one hand if you just end up giving it all back to your energy supplier right? He points out that the cheapest option is a prepayment Economy 7 tariff, which has costs limited to protect customers who tend to me more financially vulnerable.
HOW MUCH ENERGY DOES BITCOIN MINING USE? The Energy Shop has crunched the figures to show how much it can cost individuals to mine bitcoin, rather than some industrial scale operations. To mine bitcoin you need a bitcoin wallet, the mining rig, access to a mining pool, and mining software. Mining is the process of adding transaction records to bitcoin’s public ledger, or the blockchain. There are different types of mining rig. It assumes an individual miner has unlimited fast broadband connection so there are no incremental internet access or data charges. The figures show that an efficient bitcoin miner running constantly all-year round will consume as much power as four average-sized family households typically do in a year.
An older less efficient miner will consume as much electricity as almost 10 households. And remember, this is based on one rig. Many involved in this could be running more than one machine. According to The Energy Shop, day rates range from 11. With electricity being the largest variable cost of bitcoin mining, being on the right tariff can be key aspect of doing it profitably.
The Energy Shop says that miners should avoid standard variable tariffs – a rule of thumb for most households. 2,118 a year on a standard deal with the energy giant. 1,300 by switching – as could many households whose energy use is more prosaic. 2018, all calculations are for an average usage dual fuel household paying by monthly direct debit on a single rate meter. Includes publicly available tariffs that are available in at least 12 of the 14 regions of the UK. Excludes exclusive, collective and other tariffs that are not generally available. Remember bitcoin yields nothing and its main source of value is scarcity.
Most bitcoin activity is trading not investing. Research coin wallets, the digital vaults where cryptocurrency is held, and consider security carefully. Bitcoins have been stolen before, understand how this happened. The price can move by 20 per cent in one day and you could easily lose half of your cash in a far quicker time that investing in the stock market.
Consider how you would cash in any gains. There are reports that this has proved hard for some people. A time of market stress could lead to people being locked in and unable to trade. Read our guide to How to be a successful investor, which looks at the far less high octane world of long-term investing and how to make it a success. The digital currency that most will be familiar with is free from government interference and can be shared instantly online. It doesn’t rely on trusting one central monetary authority.