Estimated Consumption
Estimated consumption is a method of estimating how much electricity or power is being used by a cryptocurrency network. It takes into account the amount of computing resources required to validate transactions and secure the blockchain, as well as other factors such as storage costs and energy efficiency. This information can be useful for understanding the true cost of running certain cryptocurrencies.
Cryptocurrencies use consensus algorithms which require computers to solve complex mathematical problems in order to verify transactions on their respective blockchains (this process is known as mining). The more miners there are working on verifying these transactions, the greater the overall demand for computational power will be – resulting in higher estimated consumption levels. As such, it’s important to consider both current miner participation rates and expected future growth when analyzing estimated consumption figures.
In addition to miner activity, other factors that influence estimated consumption include:
• Storage Costs – Storing data requires an immense amount of physical space; thus increases associated with storing new blocks must also be taken into consideration when calculating total energy usage figures.
• Energy Efficiency – Certain coins may have better-optimized code than others that allow them to run at lower wattages per unit time compared with less efficient alternatives; this should not only factor into calculations but could give investors insight into potential long-term savings if they opt for one coin over another based on its performance capabilities alone!
Ultimately, understanding estimated consumption can help you make informed decisions about which coins/tokens you want your portfolio exposed too – taking advantage of those most likely able maintain low overhead costs while still providing maximum security & utility value!
