How much electricity does bitcoin consume globally? The answer is important not only for the health of the planet, but also for the currency’s value.
Researchers start by looking at the bitcoin network’s daily “hashrate”—i.e., how quickly computers on the network can perform calculations. Then they make some assumptions about the computer equipment most miners are using.1 Throw in an estimate of average electricity prices and the latest price for bitcoin, and you can get an accurate, if imprecise, estimate of electricity consumption. The most reputable such estimate comes from the University of Cambridge Bitcoin Electricity Consumption Index, according to which the global bitcoin network currently consumes about 80 terawatt-hours of electricity annually, roughly equal to the annual output of 23 coal-fired power plants, or close to what is consumed by the nation of Finland.
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Bitcoin’s energy use compared to a battery.
Let’s break that down in a way that’s a bit easier to understand. Here’s one battery. That can power… your remote control?
But who buys one battery? A pack of 40 produces 104 Wh of energy—about enough to charge an e-reader.
The amount of batteries needed to power an electric car
Instead of a pack of batteries, what if we filled up a pallet? That’s about as much electricity as you’d need to drive a typical electric vehicle from Boston to Chicago.
The number of batteries needed to power a home
Now let’s fill an entire 20-foot shipping container with batteries, and you get a little less energy than what an average American household consumes in a year.
The amount of electricity needed for one day of bitcoin mining
An Algeciras class ship, the world’s largest and the same size as Evergiven, but with slightly more capacity, can hold 24,000 of these 20-foot shipping containers. That would give you enough electricity for a two-month supply for every commercial building in the US.
This is just slightly less than one 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 one year of bitcoin mining
But what about a whole year? Cambridge estimates that to be 84.6 TWh.
Bitcoin’s carbon footprint
Energy consumption on its own is neither good nor bad from a climate perspective. Bitcoin’s electricity consumption doesn’t tell you much of anything about its carbon footprint. To reach that figure, the Cambridge analysts start by geolocating mining activity, based on users’ IP addresses 2. Then they apply more assumptions about the local mix of power sources available in those places.3
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According to Cambridge, 62% of global miners rely on hydropower for at least some of their electricity; 38% use some coal, and about 39% use at least some combination of solar, wind, or geothermal. Altogether, annual global emissions from the network are about equal to the London metro area, according to a March article in the journal Joule. But it’s important to note that these numbers are all informed guesses, based on a lot of assumptions, and liable to fluctuate seasonally and with the price of bitcoin. For example, hydro power is more readily available in China during Sichuan’s rainy season.
Bitcoin’s energy use vs the ATMs and bank data centers
Bitcoin advocates argue that all industries use a lot energy, and that it’s unfair to single out bitcoin. A May analysis by the crypto firm Galaxy Digital, for example, pointed out that bitcoin consumes a lot less electricity than the ATMs and data centers of traditional banks. Of course, traditional banks serve vastly more people than bitcoin. So the question becomes subjective: How much energy use is justifiable for a fledgling industry that benefits only a relatively tiny number of speculators?
The bitcoin mining community leans on an oft-repeated, but so far mostly unsupported, claim that their activities could actually expedite the construction of new solar and wind farms without diverting power from other uses—houses, 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 draw the ire of regulators or market-moving billionaires, time is running out to implement solutions.
In May, Elon Musk said Tesla would no longer accept bitcoin as a payment method because of environmental concerns, and the currency’s value promptly tanked. And on June 21 it sank to its second-lowest point since February, after financial authorities in China renewed a crackdown on cryptocurrency mining operations. It was a move motivated at least partially by climate considerations (in addition to bitcoin users’ ability to avoid restrictions on activities illegal in China, the risk the speculative currency poses to the financial system, and the Chinese government’s general desire for social control).
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June 25, 2021 at 11:35PM
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