Get the weekly summary of crypto market analysis, news, and forecasts! This Week’s Summary The crypto market ends the week at a total market capitalization of $2,17 trillion. Bitcoin continues to trade at around $62,300. Ethereum experiences no changes and stagnates at around $2,400. XRP is down by 2%, Solana by 1%, and Dogecoin by 3%. Almost all altcoins are trading in the red, with very few exceptions. The DeFi sector decreased the total value of protocols (TVL) to around…
Which Consumes More Energy to Produce, a Bitcoin or a Similarly Priced Tesla?
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The talk has been raging on just how much energy is consumed when mining Bitcoin. The process is very energy-intensive, with cryptography being completely reliant on electricity. It has even been pointed out that the entirety of the Bitcoin mining industry consumes more electricity than the republic of Argentina.
On the other hand, Tesla is another disruptive technology that is revolutionizing the automobile industry. The talk has been on how much fossil fuel emissions are saved, with their autopilot features being nice additives. So, what amount of energy would one need to produce a Tesla that’s similarly priced as a unit of Bitcoin?
The Choice of Tesla
The first challenge that arises is the choice of which model of Tesla to make the comparison. This choice is highly dictated by the high level of price fluctuations of Bitcoin. Several issues affect the price levels of the coin, such as the Bitcoin halving events, among others.
The current price of a unit of BTC is $32,868 as of the 8th of June, 2021, a slight pullback from $58,877 on the 9th of May 2021, exactly a month ago. There’s, however, the possibility of a bounce back to such levels in the short term.
As for the Tesla, the car model to pick should fall within the $33,000 to $59,000 range currently. The best fit from Tesla is also coincidentally their best-selling car, the Tesla Model 3 salon car. Their Standard Range Plus has $36,990, while the Performance class is at $55,990.
Energy Consumption During Production Estimates
The more technical part is the estimates of energy consumption per unit of either side. The estimates will be strictly focused on the production of the specific product and not its raw materials.
For Bitcoin, energy estimates are for mining a unit of BTC and not inclusive of energy consumed when producing the computers that mine it. Similarly, Tesla’s estimates will be on energy consumed in the Tesla factories to produce the cars, not accounting for input production energy consumption.
Bitcoin Production Energy Consumption
The entire Bitcoin mining industry consumes about 121.36 terawatt-hours of electricity per year. However, the energy used per miner is dependent on the model of machines a miner is using. The machines used to show energy consumed are the Application-Specific Integrated Circuit (ASIC) miners.
It currently takes 10 minutes of mining by ASICs to mine one BTC unit. The machine would take the average time to solve the complex computational puzzle when minting out hash rates before one is rewarded with a BTC.
Even as more people join in to try and mine, the time taken to solve the puzzle per machine is constant. What this means is that more electricity is consumed while the rate of BTC units mined stays constant.
One ASIC can produce 120 exahashes per second (an exahash has one followed by 18 zeros number of hashes). But the electricity consumption by the same machines hovers at one watt per gigahash (1 billion hashes).
Given that it will take the machine 10 minutes, equivalent to 600 seconds, to mine a BTC, the electricity to mine one unit is quite high. We multiply one watt by 120 exahashes (1 billion gigahashes) by 600 seconds and then divide the result with one gigahash. The result is 72 billion watts per unit of BTC mined.
Tesla Model 3 Production Energy Consumption
There is no energy consumed per unit of Tesla model data available on any Tesla site. Calculations have to be therefore made as total energy consumed divided by cars produced. The Tesla Model 3 is currently produced in two of Tesla’s 6 production facilities, with two more proposed production sites under construction.
The current sites are Tesla’s Gigafactory 3 in Shanghai and the Tesla factory in Fremont, CA. To estimate their energy consumption, Tesla’s Gigafactory 1 in Storey County, Nevada, shall give a good pointer. The plant has a daily consumption of 2,400MWh of electricity.
It employs 7000 employees. Both model 3 production facilities employ a combined total of 12,000 workers. Assuming constant input capital per worker, the two facilities’ daily electricity consumption should be at 4,114MWh. The two facilities also produce the rest of Tesla vehicles, with the other Tesla plants producing solar systems and auto-parts.
The total output of vehicles by Tesla was reported at 509,737 vehicles in 2020. Of these cars, 454,932 units were Tesla model 3, translating to a rounded off 90% of all cars. Given that there are 8,760 hours in a year, there are on average 51.9 Tesla model 3 being produced every hour.
To get how much electricity is consumed to produce a Tesla, we first have to convert the megawatts to watts which translates to 4.114billion watts. We then multiply the figure by 90% (to only drive at Tesla model 3 figures) and divide the result with the 51.9 cars produced every hour. The result is 71.3 million watts per unit of Tesla model 3 manufactured.
Conclusion
From the calculations, mining a single unit of Bitcoin consumes 72 billion watts, much higher than the 71.3 million watts it would take to produce one Tesla Model 3. Such figures are very startling, but there are however important disclaimers.
Btc
Bitcoin
$62.547
price
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0.84959%
price change
Exact electricity production data for Tesla is proprietor to Tesla Inc, making the above calculations pure estimates. There could also be much higher levels of automation in the more modern Shanghai Gigafactory given its deficient number of workers at 2000 vs. 7000 for the Nevada factory and 10,000 for the Fremont one. This heavily skews the results by a huge margin. The calculations for Tesla also ignore the rest of the firm’s production line for auto parts and other car support features.
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Adam Robertson
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