Speculation that Bitcoin mining will lead to “uncontrolled growth” in electricity consumption may be overblown, recalling the hype that surrounded projections for data centers and marijuana growing.

While Bitcoin miners currently use about as much electricity as Ireland, they are "very unlikely" to reach the "ultra-high-end" threshold of 350 terawatt-hours a year — a level that would only amount to 1.4 percent of global demand, according to a research note published Tuesday by Credit Suisse Group AG.

“This is a far cry from the power and environmental Armageddon that some have feared,” the analysts, led by Michael Weinstein, wrote in the report.

There’s a growing debate over how much power will be sucked up by the world’s growing ranks of cryptocurrency miners. When Bitcoin skyrocketed in 2017, the electricity demand associated with it climbed to about 20.5 terawatt-hours a year, according to a report published last week by Bloomberg New Energy Finance. Miners earn bitcoin-denominated rewards for performing the complex calculations needed to confirm transactions in the cryptocurrency.

Morgan Stanley analysts said in a note last week that these miners could require up to 140 terawatt-hours of electricity in 2018, about 0.6 percent of the global total. The trend could be a growth driver for renewable energy producers from the U.S. to China, the analysts said.

Hydro-Quebec, Canada’s biggest electric utility, has said it’s in "very advanced" talks with miners about relocating there and that it envisions them soaking up about five terawatt-hours of power annually — equivalent to about 300,000 Quebec homes — from the surplus created by the region’s hydroelectric dams.

Urges Caution

Credit Suisse offered caution for investors hoping to "benefit significantly" from the growth in global electricity demand. At current Bitcoin and electricity prices, power and fuel suppliers may have as much as $5 billion in "global annual revenue opportunity." That compares to the more than $6 trillion of global energy expenditures each year.

“This is a small portion of global electric usage and an even smaller portion of total global energy expenditures,” the report said.

For more on Bitcoin’s recent reversal of fortunes, read this story

The commentary about Bitcoin and electricity usage is reminiscent of that concerning data centers and marijuana cultivation in recent years, the analysts said. In both cases, energy efficiency measures helped dash early estimates of ballooning electricity demand.

“The data center industry has demonstrated its ability to vastly improve energy efficiency as it has scaled upward," the report said. 

As for marijuana, “with legalization, growers began upgrading to energy-efficient LED lights, pumps and cooling systems as they no longer have to hide their plants from law enforcement."

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Read more: https://www.bloomberg.com/news/articles/2018-01-16/bitcoin-s-power-needs-may-be-overblown-recalling-pot-growing