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How much electricity does bitcoin consume in the world? The answer is important not only for the health of the planet, but also for the value of currencies.
Researchers start by examining bitcoin networks on a daily basis – that is, how fast computers on the network can perform calculations. Then they make assumptions about the computer equipment that most miners use. Add an estimate of average electricity prices and the latest bitcoin price, and you can get an accurate, though imprecise, estimate of electricity consumption. The most reliable estimate of this type comes from the University of Cambridge’s Bitcoin Electricity Consumption Index, which found that the global bitcoin network currently consumes around 80 terawatt-hours of electricity per year, or roughly l equivalent to the annual output of 23 coal-fired power plants, or roughly. to what is consumed by the Finnish nation.
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Since electricity costs are the biggest drag on a miner’s profitability, the assumption is that most miners will use the most efficient equipment on the market.
Energy consumption of Bitcoins compared to a battery.
Let’s break this down in a way that’s a little easier to understand. Here is a battery. Who can power your remote?
But who buys a battery? A 40 pack produces 104 Wh of energy, enough to charge an eReader.
The amount of batteries needed to power an electric car
Instead of a battery pack, what if we filled a pallet? That’s about as much electricity as it takes to drive a typical electric vehicle from Boston to Chicago.
The number of batteries needed to power a house
Now let’s fill an entire 20ft sea container with batteries, and you get a little less power than what an average American household consumes in a year.
The amount of electricity needed for a day of bitcoin mining
An Algeciras-class ship, the largest in the world and the same size as Evergiven, but with a slightly larger capacity, can hold 24,000 of these 20-foot sea containers. That would give you enough electricity for a two-month supply for every commercial building in the United States.
It’s just under a day of bitcoin mining, which according to the Cambridge Index is 231,726,027 kWh (231.7 GWh).
The number of AA batteries needed for a year of bitcoin mining
But what about an entire year? Cambridge estimates it at 84.6 TWh.
Bitcoin carbon footprint
Energy consumption in itself is neither good nor bad from a climate point of view. Bitcoin’s electricity consumption doesn’t tell you much about its carbon footprint. To reach this figure, Cambridge analysts start by geolocating mining activity, based on users’ IP addresses. Then they apply more assumptions about the local mix of energy sources available in those places.
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They find that about 65% of mining activity takes place in China, followed by 7% in the United States and 7% in Russia.
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The miners themselves are often discreet about their sources of energy.
According to Cambridge, 62% of the world’s miners depend on hydropower for at least some of their electricity; 38% use coal and about 39% use at least some combination of solar, wind or geothermal energy. In total, the network’s annual global emissions are roughly equal to those of the London metropolitan area, according to a March article in the Joule newspaper. But it’s important to note that these numbers are all educated guesses, based on many assumptions, and likely to fluctuate seasonally and with the price of bitcoin. For example, hydropower is more readily available in China during the Sichuan rainy season.
Bitcoin energy consumption compared to ATMs and bank data centers
Bitcoin advocates argue that all industries use a lot of energy and that it is unfair to single out bitcoin. A May analysis from crypto firm Galaxy Digital, for example, pointed out that bitcoin uses significantly less electricity than traditional bank ATMs and data centers. Of course, traditional banks serve a lot more people than bitcoin. The question therefore becomes subjective: what energy consumption is justifiable for a nascent industry which only benefits a relatively small number of speculators?
The bitcoin mining community relies on an oft-repeated, but so far largely unsupported claim that their activities could in fact speed up the construction of new solar and wind farms without diverting energy from other homes. use, hospitals, warehouses, electric vehicles, literally almost anything that uses electricity. If crypto holders want to retain the value of their investment and not continue to attract the wrath of regulators or billionaires operating in the market, time is running out to implement solutions.
In May, Elon Musk said Tesla would no longer accept bitcoin as a payment method due to environmental concerns and that the value of currencies fell rapidly. And on June 21, it hit its second lowest level since February, after Chinese financial authorities renewed the crackdown on cryptocurrency mining operations. It was a decision motivated at least in part by climatic considerations (in addition to the ability of bitcoin users to avoid restrictions on illegal activity in China, the risk that speculative currency poses to the financial system, and the desire General of the Chinese Government of Social Control).
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