The rising value of Bitcoin leads to ever-higher energy consumption, researchers say. Graph of countries and electricity consumption.
Table of contents
- Did you know Bitcoin runs on an energy-intensive network?
- The Last Word on Bitcoin’s Energy Consumption
- bitcoin energy consumption chart
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.
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- Global Bitcoin (BTC, BTH) energy consumption up until March 24, 2021.
- Associated Data.
Miners are rewarded in bitcoin. But the way bitcoin mining has been set up by its creator or creators — no one really knows for sure who created it is that there is a finite number of bitcoins that can be mined: 21m. The more bitcoin that is mined, the harder the algorithms that must be solved to get a bitcoin become.
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Now that over Instead, mining now requires special computer equipment that can handle the intense processing power needed to get bitcoin today. And, of course, these special computers need a lot of electricity to run. Proponents of bitcoin say that mining is increasingly being done with electricity from renewable sources as that type of energy becomes cheaper, and the energy used is far lower than that of other, more wasteful, uses of power. The power grids miners draw on are also changing over time and can change in their fuel sources between seasons.
That means a local utility could be getting cleaner or dirtier over time, and if more fossil fuels are coming online to meet the demand, that would lead to more greenhouse gas emissions. In so doing, the CoinShares team found that bitcoin miners were using a disproportionate share of renewables. This is why you see miners flock to regions where high-powered renewables are abundant. Regions with high levels of renewable energy and low demand are often areas that saw local industries leave in recent years and subsequently experienced a population exodus.
So bitcoin miners, who care more about electricity costs than location, happily moved into renewable-powered rust belts around the world.
Did you know Bitcoin runs on an energy-intensive network?
Governments have had mixed reactions to the rise of cryptocurrencies like bitcoin and their rapacious demand for electricity. In Quebec , the government is offering discounted electricity to lure in miners to boost the economy. Meanwhile, China is weighing an outright ban on cryptocurrency mining because it sees miners as scofflaws that are wasting resources and damaging the environment. Bendiksen said bitcoin mining is making use of energy resources that would otherwise go to waste and that renewable power mitigates its environmental footprint.
He noted that its estimate of renewable energy use in bitcoin mining is out of line with other calculations. A report from the University of Cambridge , for example, found that while the majority of bitcoin mining facilities drew on renewables to some extent, the average share was just 28 percent. In a separate paper published in Joule in April, de Vries explained that even the renewables being used for bitcoin mining have their own consequences. Hydropower in particular has huge regional environmental effects and sometimes has to be backed up by fossil fuels.
The Last Word on Bitcoin’s Energy Consumption
Production of hydropower is high in the wet season during the summer months and low in the dry season during the winter months. And since miners are concerned about energy costs above all else, a glut in coal, oil, or natural gas could make burning them much more attractive.
Another emerging concern around bitcoin is the electronic waste. But mining bitcoins remains profitable, so the amount of hardware it uses and the quantity of electricity it inhales will continue to surge dramatically for years. Another price spike could push energy use even higher. Our mission has never been more vital than it is in this moment: to empower through understanding.
bitcoin energy consumption chart
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They have also shot down one of Coyler's major selling points: That bitcoin mining can make the energy transition smoother. According to Coyler, bitcoin miners will naturally seek the cheapest energy source in a bid to maximize their profits--which happens to be renewable energy in places like North America. The Foundry CEO does have a valid point. Mid-last year, UAE-based clean energy think tank International Renewable Energy Agency IRENA reported that more than half of the renewable capacity added in achieved lower power costs than the cheapest new coal plants.
Two years ago, CoinShares made the controversial claim that the bitcoin network gets Christopher Bendiksen, head of research at CoinShares, has warned that another price spike could push energy use even higher:. If the bitcoin price goes up by 10x, you would expect the energy consumption of the network to also go up by 10x.