How much energy does bitcoin use?
The answer is important not only for the health of the planet, but also for the currencys value. Researchers start by looking at the bitcoin networks daily hashratei.e., how quickly computers on the network can perform calculations. Then they make some assumptions about the computer equipment most miners are using. 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. 1 Since electricity expenses are the biggest drag on a miner's profitability, the assumption is that most miners will use the most efficient equipment on the market  Bitcoins energy use compared to a battery. Lets break that down in a way thats a bit easier to understand. Heres one battery. A pack of 40 produces 104 Wh of energyabout enough to charge an e-reader. Thats about as much electricity as youd need to drive a typical electric vehicle from Boston to Chicago. The number of batteries needed to power a home  Now lets 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 worlds 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). Cambridge estimates that to be 84.6 TWh. Bitcoins carbon footprint  Energy consumption on its own is neither good nor bad from a climate perspective. Bitcoins electricity consumption doesnt 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 . Then they apply more assumptions about the local mix of power sources available in those places. 2 They find that about 65% of mining activity occurs in China, followed by 7% in the US and 7% in Russia. 3 Miners themselves are often tight-lipped about their energy sources. 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 its 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 Sichuans rainy season. Bitcoins energy use vs the ATMs and bank data centers  Bitcoin advocates argue that all industries use a lot energy, and that its 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. 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 useshouses, 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 currencys 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 governments general desire for social control).