New data shows an increase in electricity consumption due to Bitcoin mining. However, Bitcoin is not as energy-intensive as some people claim, especially if you look at it from a broader perspective.
Bitcoin’s energy consumption already exceeds that of 2020
On September 13, 2021, Bloomberg published an article stating that Bitcoin has already far surpassed its 2020 energy consumption of about 67 TW/h in 2021. The Cambridge Bitcoin Electricity Consumption Index (CBECI), by the way, estimates that Bitcoin mining will consume a total of 95.68 TW/h, by the end of 2021. Bitcoin’s bullish rally makes it ever more attractive, and increases the number of miners using less energy-efficient (because more powerful) machines that join the network en masse, leading to an explosion in electricity consumption.
Moreover, the simple variable of energy consumption is not the only one that needs to be considered when assessing the ecological footprint of Bitcoin mining. The study by Science Direct also highlights the electronic waste produced by mining. This includes discarded computer and electronic equipment. A Bitcoin transaction indirectly generates an e-waste bill, which is mainly made up of old mining equipment. In May 2021, the volume of e-waste produced amounted to 30,700 tons. This figure could reach 64,400 tons of e-waste by the end of 2021.
Energy-efficient Bitcoin: the data on a green Bitcoin
However, the simplistic equation that “Bitcoin mining = energy drain = pollution” should be contrasted. Since the forced exodus of miners from China, much of the energy used for Bitcoin mining falls into the renewable energy category. New mining farms in the United States and Canada are also powered largely by green energy.
According to CBECI, Bitcoin mining currently consumes 116.71 terawatt hours per year, with hydroelectric power being the most widely used:
“Hydropower is cited as the number one energy source, with 62% of operators surveyed indicating that their mining operations are powered by hydropower. Other types of clean energy, such as wind and solar rank further behind coal and natural gas, which account for 38% and 36% of respondents’ energy sources, respectively.”
CBECI data further indicates that 25,082 TWh of energy is produced globally each year, of which only 20,863 TWh is consumed. 4,219 TWh, or 16.82%, is thus wasted. Finally, Bitcoin spends only 0.47% of the total energy produced and 0.54% of the total electricity consumption in the world.
Bitcoiners are continuing their efforts to make Bitcoin greener and greener, before ensuring its sustainability in the face of pressure from environmentalists. Some investment funds are going so far as to create a green Bitcoin ETF by buying carbon credits, a practice that is not very convincing from an environmental point of view.
