Bitcoin uses more energy in 2021 than in 2020 as crypto mining climate debate intensifies

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Bitcoin has already used more energy so far this year than throughout 2020, a new study has suggested, as the debate over the impact of cryptocurrency mining on the environment intensifies.

Bitcoin is expected to use 91 TWh of energy by the end of this year, according to a Bloomberg report, which noted that it is as much energy as Pakistan. Last year, it was estimated that Bitcoin consumed around 67 TWh of electricity.

While it is difficult to track the amount of energy used by Bitcoin mining, the trend is clear. The Cambridge Bitcoin Electricity Consumption Index estimates that Bitcoin will consume 95.68 TW / hr by the end of the year, which roughly matches the power consumption of the Philippines.

Why does Bitcoin use so much energy?

Bitcoin uses a system called “proof of work”, the mechanism is used to confirm transactions and add new blocks to the chain. Its decentralized system requires a global network of computers to operate while a transaction is taking place. This is why it consumes so much energy, because it is designed to encourage increased computational effort.

Bitcoin could move to the more energy-efficient “Proof of Stake” mechanism, which randomly allocates coins to users who provide their own tokens as collateral.

The Bloomberg report states that as the price of Bitcoin rises, more and more miners with less energy-efficient machines are joining the network, which in turn increases power consumption.

The report said it was “essential to improve the efficiency of crypto-mining and shift to low-carbon energy sources for electricity.”

Electronic waste

But it’s not just Bitcoin mining that is costing the environment. Computer equipment used for mining typically only lasts a year and a half. It cannot then be discarded afterwards as the equipment can only be used for mining.

Science Direct has discovered that as a result, a transaction on the Bitcoin network produces 272 grams of electronic waste.

When governments and Elon Musk get involved

One of the most important figures to add to the crypto environment debate is Tesla CEO Elon Musk.

Earlier this year, he said the electric car maker would accept Bitcoin as a form of payment, but environmentalists later convinced Musk to reverse his decision.

Musk subsequently announced that the company would no longer accept crypto payments for Tesla vehicles until at least 50% of mining operations use green energy. But that hasn’t happened yet.

Cryptocurrency experts have previously told Euronews Next that crypto miners have no incentive to make greener choices.

Governments are also influencing the debate. China and Iran have temporarily halted Bitcoin mining due to massive energy consumption causing blackouts in some areas.

In the United States, Senator Elizabeth Warren faced off against two cryptocurrency CEOs.

Earlier this month, she tweeted a New York Times article on the environmental impact of cryptos and wrote: “Bitcoin mining uses roughly the same amount of electricity as Washington State, which puts pressure on our electricity networks and worsens the #ClimateCrise. We must protect our planet and fight against environmentally harmful cryptocurrency mining practices. “

In response, MicroStrategy CEO Michael Saylor tweeted, “#Bitcoin mining converts wasted and stranded energy into digital energy, the natural successor to chemical and electrical energy. It can be managed by any computer, transferred anywhere at the speed of light, and lasts forever, improving our climate, our economy and our power grid. “

Meanwhile, FTX CEO Sam Bankman-Fried responded to Warren saying Bitcoin mining could be improved but is “in line with its economic impact.”

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