Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche


The Coming Electricity Shortage, Technology’s insatiable demand for juice may spell disaster

The world is facing a potential electricity shortage that might affect almost everybody because of technology’s growing and insatiable demand for power. New tech has the potential to gobble up electricity faster than we can produce it.

Cryptocurrency mining; a tremendous electricity hog, should serve as a warning of the potential troubles and shortages to come. The mining of just one altcoin; Bitcoin (BTC), was consuming around 42 terawatt hours (TWh) in 2017, The Guardian’s Alex Hern estimated. That was more electricity than the nations of New Zealand and Hungary used.

Frighteningly, Bitcoin’s energy consumption is growing dramatically. Bitcoin miners consumed around 9.589 TWh worth of electricity in February 2017, and 60.976 TWh by April 15, 2018, Digiconomist’s Bitcoin Energy Consumption Index indicates. If that figure is correct Bitcoin mining electricity consumption increased more than six-fold in a little over a year.

Mining uses a lot of electricity because each altcoin is created by solving complex mathematical problems or puzzles that require vast amounts of computer power. The total volume of energy cryptocurrency uses is huge but it is only a tiny fraction of total electricity consumption.

Bitcoin mining consumes between one and four gigawatts, or one and four billion watts, of electricity, unidentified “experts” told The Washington Post. That is might be enough to power the nation of Denmark.

Cryptocurrency is exploding

What is truly disturbing here is that Bitcoin is just one cryptocurrency, there are currently more than 1,000 on the market, and more coming each day. There were just 43 initial cryptocurrency offerings (ICOs) in 2016, that figure grew to 210 ICOs in 2017, and 176 ICOs have been held so far in the first four months of 2018, Coinschedule data indicates.

The amount of money involved in ICOs is exploding, just $95.181 million was raised by ICOs in 2016, that figure increased to $3.88 billion in 2017, and $5.961 billion in the 1st Quarter of 2018. Interest in existing altcoins is also high, Bitcoin experienced record trading volumes on April 12, 2018, MarketWatch noted.

These figures indicate that cryptocurrency energy consumption is likely to see a six or 10 fold increase over the next year. Predictions that altcoin might soon put a strain on power grids and cause blackouts may come true. Environmental effects are likely to be bad, especially if miners use power from fossil fuel burning.

Currently, miners are concentrating their efforts in areas with low-pollution, hydroelectricity which is the cheapest such as Iceland. What happens when mining gets big in areas with cheap fossil fuels like Venezuela; lots of oil and little cash, or Saudi Arabia.

It is likely to happen and soon, particularly as oil prices fall, and oil producers start burning crude to generate electricity for mining. This trend is already starting in Venezuela where the government is promoting cryptocurrency.

Cryptocurrency is the Tip of the Iceberg

What is far more frightening is that cryptocurrency is just the tip of the iceberg when it comes to electricity-hungry tech. Several technologies that might be huge electricity hogs are about to go into wide use. Some of them will be greater consumers of power than cryptocurrency.

Technologies that will use massive amounts of electricity:

The Blockchain

Cryptocurrencies are simply one of a wide variety of software applications that can operate on the system known as the blockchain.

A host of similar blockchain solutions that might be more popular are being brought to market. Major users will include DApps (decentralized applications), smart contracts, exchanges, messaging applications, and video games and videos delivered through the blockchain. There are even plans for supercomputers and artificial intelligence that operate through the blockchain.

Basically, anything that operates on the blockchain will use as much electricity as the cryptocurrency. Complex blockchain constructs like games, exchanges, smart contracts, hedge funds, bank accounts, marketplaces, storage solutions, payment processors, and messaging systems will probably use more power than cryptocurrencies.

Artificial Intelligence (AI)

AI for the masses is right around the corner and it is likely to be a huge energy hog.

Aitheon is planning a system that delivers AIs to operate self-driving vehicles, automated stores, and robots through the blockchain. It is not alone a Dutch company called Singularity.Net has plans to sell artificial intelligence over the blockchain to everybody. Since AIs are far more complex than cryptocurrencies they will use far more electricity.

Huge users of electricity will be video games, accounting solutions, investment managers, money managers, robot operating systems, payment-processing systems, and writing programs that contain AI. AI will use a lot of power because it will require high-powered processors like those built by NVIDIA.

Robots and Drones

These will be operated by increasingly powerful processors like those provided by NVIDIA (NASDAQ: NVDA). Such processors may use as much electricity as a mining rig and they will be far more widespread.

Major users of electricity will be robots in small businesses like restaurants, bakeries and machine shops. Other users will be larger and larger drones.

Digital Robots or Bots

Highly-complex digital robots; or digibots, have already become commonplace in fields like finance and digital advertising.

Companies like Aitheon now have plans to deploy such solutions to industry and self-driving vehicles. Such an application even has a name it is called Robotic Process Automation.

Like AI such bots will need a lot of processing power to operate. That situation will be good for NVIDIA stockholders but bad for your electric bill.

Automated and Partially Automated Retail Stores

Amazon (NASDAQ: AMZN) is already testing an automated grocery outlet called Go in Seattle. Many Walmart (WMT) and Kroger (KR) stores in the United States are already partially automated. Walmart is testing the use of AI shopping assistants in New York and New Jersey.

These will use a lot of electricity because they might be run by AI; or digital robots, and require a lot of processing power. Aitheon has plans for such a store which would be integrated with its blockchain-platform and AI that sounds like a major-league electricity hog.

Video Games

These entertainments are getting popular and complex each day and consuming vast amounts of computing power. Many modern video games use the same processors and chips as cryptocurrency mining, so they are energy hogs.

That use is likely to increase fast, artificial intelligence will be coming to video games, The MIT Technology Review predicted. The Chinese gaming powerhouse Mob Arts has plans to market its video games through a blockchain platform called 777.Bingo.

Games might be a far worse electricity hog than cryptocurrency because there were 2.210 billion video gamers worldwide in 2017, Statista estimated. That figure is forecast to grow to 2.725 billion by 2021.

Electric Trucks

These will be the biggest users of electricity; the Tesla Motors (NASDAQ: TSLA) semi might consume as much electricity as a town of 2,693 people, and it is already on the road.

Tesla is far from alone. Daimler AG is testing all-electric delivery and heavy truck trucks in Europe. Cummins, one of America’s largest diesel engine makers is planning its own electric semi called Aeos, Eletrek reported. Other companies will not be far behind. Volkswagen’s Man subsidiary is planning to invest $1.7 billion in a variety of electric trucks and buses.

Major electricity hogs will be electric-powered fire trucks, garbage trucks, cement mixers, and dump trucks. Each of which will require vast amounts of additional power to run the piece of equipment it hauls such as a garbage compactor or a pump. A fire engine is basically a high-pressure pumping station on wheels.

Electric Delivery Vans and Trucks

UPS or United Parcel Service is already deploying electric-powered delivery vans in some US cities.

Companies like Amazon (NASDAQ: AMZN), Kroger, Safeway, Walmart, Uber, GrubHub (NYSE: GRUB), and Instacart have plans for vast nationwide delivery networks that will use vans. Those companies will go electric fast because an electric van can be charged right at the store with no gas pump and electricity is cheaper than diesel fuel.

Volkswagen has already started manufacturing an electric delivery van called the VW I.D. Buzz cargo in Europe. VW reportedly has plans for at least one other electric cargo van.

A major league electricity consumer would be electric-powered food delivery vehicles which might carry refrigerators, freezers, or even ovens. Dominos has tested a delivery car with a built-in pizza oven in some markets, that sounds like an incredible burner of electricity.

Electric Heavy Equipment

Not far behind the trucks will be electric-powered heavy equipment such as bulldozers, loaders, power shovels, backhoes, cranes, forklifts, rollers, and tractors. These machines are not here but they are undoubtedly coming.

Electric-powered heavy equipment has several advantages over diesel that will make it popular. Such machines might be quieter, they would comply with anti-pollution laws, and no diesel-fuel storage tanks are needed. Instead of needing to be refueled an electric earthmover would draw a continuous stream of juice from the grid so it can do more work.

Battery-powered heavy machines are not here but many companies; including Caterpillar, already make electric-drive machines that can be easily adopted for battery power. Such heavy equipment will probably use more electricity than electric trucks.

Electric Cars

Tesla is already manufacturing three electric cars, and has plans for a fourth model and an electric pickup on the drawing board. One of those electrics, the Model 3 is aimed at a mass-market.

Demand for the Model 3 is so high that Elon Musk announced plans to build 6,000 a week, and run his factory on a 24 hour a day, seven-day a week basis through June 2018, The Verge reported. Musk’s future plans are even greater his Gigafactory in Storey County, Nevada, is intended to manufacture enough batteries each year to store one billion watts or one Gigawatt watt of electricity. Musk has plans for several Gigafactories on the drawing board.

Tesla’s plans are dwarfed by Volkswagen (OTC: VLKAY) which is planning to invest $82.5 billion in electric vehicles, Fortune reported. Long-term plans at VW include 80 electrified models by 2025, a network of charging stations to compete with Tesla’s, and its own gigafactory in Germany.

Unlike the money-losing Tesla, Volkswagen has the money to accomplish its electric plans. Ycharts reported that Volkswagen had $45.81 billion in cash and short-term investments; money in the bank, on December 31, 2017.

VW and Tesla are far from alone. Several major automakers including General Motors, Tata; owner of Jaguar and Land Rover, Nissan, Toyota, Volvo, and even Maserati have announced electric plans. The electric-powered Jaguar I-Pace is scheduled to hit the road this year.

Electricity Shortages are Coming

Disturbingly, the electricity hogs listed above are just the tip of the iceberg. Other major uses of wattage that might soon appear or grow include:

  • Virtual private networks or VPNs.


  • Electric-powered flying cars – these are giant electric-powered drones operated by high-powered processors.


  • Autonomous cars and trucks each one uses a high-powered processor.

  • Blockchain operated vehicles and robots.


  • Financial Technology or Fintech


  • Cryptocurrency Exchanges.


  • Cloud-based Storage.


  • Big Data


  • Fulfillment centers for e-commerce.


  • Data Mining


  • The Internet of Things (IoT)


  • The Industrial Internet of Things (IoT)


  • Streaming Video


  • Supercomputers there are plans for decentralized supercomputers that operate on the blockchain. That will be a major energy hog.

The World needs more Electricity

The bottom line is that the world is going to need far more electricity and fast. If not shortages, blackouts, brownouts, and high electricity bills will be a regular occurrence.

More investment in energy research and development particularly hot fusion; which might be just a few years away is needed now. Investors can prepare for this situation by buying Tesla or Volkswagen stock.

Tesla Energy (NASDAQ: TSLA) manufactures backup storage batteries and owns SolarCity a major manufacturer of solar cells and panels. Musk has a solar gigafactory in Buffalo, New York, and plans to manufacturer solar tiles. Another interesting investment is Panasonic (TYO: 6752) which manufactures batteries and solar panels.

If technology keeps using more electricity there will be vast amounts of demand for storage batteries and solar cells. One wonders if new technology will be able to supply enough electricity for all the demand for electricity other tech is creating.