Bitcoin mining – the process in which a bitcoin is awarded to a computer that solves a complex series of algorithms – is a deeply energy-intensive process. When people mine bitcoins, what they are really doing is updating the ledger of Bitcoin transactions, also known as the blockchain. This requires them to solve numerical puzzles which have a 64-digit hexadecimal solution known as a hash. The hash rate is the measuring unit of the processing power of the Bitcoin network.
On March 18, 2021, the annual power consumption of the Bitcoin network was estimated to be 129 terawatt-hours (TWh). Alex de Vries, a Dutch economist who created the Bitcoin Energy Consumption Index, estimates that crypto electricity use has more than doubled since 2017.
According to some estimates:
- The entire banking system uses over 650 terawatt-hours/annually.
- Today, the Bitcoin network uses 144 terrawatt-hours/annually.
- The entire United States uses ~4,000 TWh per year.
If Bitcoin were a country, it would rank 29th out of a theoretical 196 countries, exceeding Norway’s consumption of 124 TWh. When compared to larger countries like the U.S. (3,989 TWh) and China (6,543 TWh), the cryptocurrency’s energy consumption is still relatively light.
A single transaction of Bitcoin has the same carbon footprint as 680,000 Visa transactions or 51,210 hours of watching YouTube, according to the Cambridge Centre for Alternative Finances. For further comparison, the Bitcoin network consumes 1,708% more electricity than Google.
Of the nations with mining operations, Bitcoin makes up no more than 1.29% of any one country's total power consumption. In the U.S., video game consoles make up about 0.25% of energy consumption, while construction, commercial cooling, commercial ventilation and commercial lighting range from 2% to 3%.
According to Cambridge, China has the most bitcoin mining of any country by far. While the country has been slowly moving toward renewable energy, about two-thirds of its electricity comes from coal. In a 2020 report by the University of Cambridge, researchers found that 76% of cryptominers rely on some degree of renewable energy to power their operations. There’s still room for improvement, though, as renewables account for just 39% of cryptomining’s total energy consumption.
Some believe that cryptomining may eventually support the global transition to renewable energy. Twitter chief executive Jack Dorsey said late last year that cryptocurrencies "will eventually be powered completely by clean power, eliminating its carbon footprint and driving adoption of renewables globally.”
Sources
https://www.jbs.cam.ac.uk/wp-content/uploads/2021/01/2021-ccaf-3rd-globa...
https://www.cell.com/joule/pdf/S2542-4351(19)30255-7.pdf
https://www.theguardian.com/technology/2021/feb/27/bitcoin-mining-electr...
https://www.visualcapitalist.com/visualizing-the-power-consumption-of-bi...
https://markets.businessinsider.com/currencies/news/bitcoin-mining-energ...
https://www.businessinsider.com/bitcoin-uses-as-much-energy-as-sweden-an...
https://www.entrepreneur.com/article/370212
https://www.economist.com/graphic-detail/2021/05/14/as-the-price-of-bitc...
