A number of journalists have relayed this claim lately, but I find it disingenuous as it avoid talking about the real reason (volatility) and it hides the big picture (Bitcoin is up 3200% over the last two years [1]).

Otherwise, this is a good article about mining. But one comment I would like to make is that people, like this author, sometimes claim Bitcoin's mining consume a lot of electricity. But compared to what? It is fair to compare it to the many data centers owned and operated by credit card processors, banks, and all sorts of financial companies, but only to the portion of these data centers that fulfill a role roughly comparable to Bitcoin: processing transactions, verifying fraud, etc. Let's do some math: North American data center market power consumption is about 12 gigawatt [2]. I don't know what the world data center power consumption is, but let's assume ~3x that, or 30 gigawatt [3]. Let's assume that 1/3 of these data centers belong to financial companies, so 10 gigawatt are consumed by financial data centers. If half of these data centers are used to process transactions and for anti-fraud purposes, that's 5 gigawatt. By comparison, Bitcoin's mining operations worldwide are estimated to consume 150 megawatt [4]. So Bitcoin mining uses 3% of the electricity of what financial companies use for similar purposes.

[1] From $6 in January 2013 to $200 as of today: http://bitcoincharts.com/charts/bitstampUSD#rg730ztgSzm1g10z...

[2] http://www.datacenterdynamics.com/focus/archive/2014/01/15-g...

[3] 30 gigawatt is also approximately in line with the often quoted estimate that data centers use ~1% of the world's electricity (~1% of 2500 gigawatt).

[4] http://www.eetimes.com/document.asp?doc_id=1323522 - the global hashrate has increased by 50% since this article was written (~200 petahash/sec in August 2014, to ~300 petahash/sec today) but at the same time hardware efficiency (hash/sec per watt) has increased, so the ballpark number is correct. In fact the economist article also estimates it at ~135,000 average american homes, or 168 megawatt (1 average home = 1250 watt).

Edit: @the_mitsuhiko: By definition, "volatility" is a price variation over time, regardless if it is consistent or not.