Revealed: The Staggering Amount of Electricity Bitcoin Uses

Bitcoin mining consumes more electricity than most countries, according to a new report on its harmful environmental impact.

Mining is the process by which transactions are added to and validated on the blockchain, the public ledger for cryptocurrencies.

Competing miners race to use computers to solve complex mathematical puzzles using extremely powerful hardware – and receive new Bitcoin as a reward for their efforts.

In 2020 to 2021, Bitcoin consumed 173.42 terawatt-hours of electricity – enough to place it 27th among nations, trumping e.g. Pakistan with a population of over 230 million people.

The resulting carbon footprint was equivalent to burning 84 billion pounds of coal.

To offset this is a study of United Nations The university found that 3.9 billion trees needed to be planted, covering an area almost equal to Netherlands, Switzerlandor Denmark.

Professor Kaveh Madani said: “Technological innovations are often associated with unintended consequences.

“Bitcoin is no exception.”

Which power is driving mining – and which countries are leading the way?

The UN team’s research, published in the journal Earth’s Future, found that Bitcoin mining is heavily dependent on Fossil fuels.

Coal made up 45% of its supply mix during this period, followed by natural gas at 21%.

Renewable energy sources such as sun and wind made up a relatively small part of electricity consumption between 2020 and 2021.

But organizations including the Bitcoin Mining Council – which represents 43% of miners around the world – argue that this energy-intensive process has become more environmentally friendly since.

Its figures suggest that 59.9% of the electricity used by members came from sustainable sources in the first six months of 2023. However, these figures are difficult to verify and only represent less than half of the total network.

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At the time of the UN review in 2021, China was by far the largest Bitcoin mining operation – but it has since been overtaken by the US after Beijing launched an aggressive crackdown on the practice.

Together, the 10 countries that mined the most Bitcoin were responsible for 92% of the climate footprint.

Chart showing countries ranked by how much electricity Bitcoin mining used in 2020-21
Countries ranked by how much electricity their Bitcoin mining used in 2020-21

“Our findings should not discourage the use of digital currencies,” Professor Madani added.

“Instead, they should encourage us to invest in regulatory interventions and technological advances that improve the efficiency of the global financial system without harming the environment.”

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Are there alternatives?

Some blockchains have already moved away from mining in favor of greener alternatives.

The Ethereum network – the second largest after Bitcoin – made miners obsolete in September 2022 after an ambitious upgrade.

Instead, new transactions are approved by people who voluntarily unlock their cryptocurrency – and according to the Ethereum Foundation, this approach uses 99% less energy.

Greenpeace has been lobbying for Bitcoin miners to follow suit, but their pleas have fallen on deaf ears.

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