According to new estimates published by researchers at the University of Cambridge, Bitcoin consumes more energy than the entire nation of Switzerland! They got their numbers from an online tool called the Cambridge Bitcoin Electricity Consumption Index, or CBECI – which estimates how much energy is needed to maintain the Bitcoin network in realtime. It then uses the data to calculate its annual energy usage. The tool is intended to make it easier to see how the cryptocurrency network’s energy usage compares with other entities. You can read more about the exact methodology used to calculate the CBECI here.
The CBECI shows that the global Bitcoin network is currently consuming more than seven gigawatts of electricity, which is equal to around 64 TWh (terawatt hours) of energy consumption over the course of a year. To illustrate the amount: it is more than the country of Switzerland uses (58 TWh per year), but less than Colombia (68 TWh per year). In the ranks of nations, it is the “41st most energy-demanding country.” From the perspective of global energy use, it is equal to 0.21% of the world’s supply.
On the CBECI website, they give some other clever examples to illustrate how much energy the Bitcoin network uses. They explain how 0.21% of energy usage is “as much energy as all the tea kettles the UK use over 11 years.” Looking at it from another standpoint, it’s only a quarter of how much electricity is wasted each year by “always-on but inactive electronic devices in America.” All that wasted power on unused electronics could power the Bitcoin network four times over.
One of the co-creators of the CBECI, Michel Rauchs, told BBC News:
We want to use comparisons that set the narrative. Visitors to the website can make up their own mind as to whether it seems large or small.
Why does the Bitcoin network use so much electricity? Because the miners around the world running the computer hardware necessary to maintain the network (generate new bitcoins) and validate payments requires a huge amount of electricity 24/7. The network does all this through a system of solving complex mathematical puzzles. This requires warehouses full of computers to be figuring them out non-stop. Of course, as the network grows, so does the computing power required to solve the ever-increasingly complex puzzles and the environmental impact of the cryptocurrency worsens.
The researchers wrote in a blog post:
The index has been developed in response to growing concerns over the sustainability and environmental impact of bitcoin mining. The CBECI provides a neutral and objective platform for reliable information on bitcoin’s electricity consumption for use by policymakers, regulators, researchers, the media and others.
So, is Bitcoin bad? Not necessarily, and it’s also worth noting that these figures are very much estimates. In a blog post announcing the new index, the Cambridge Centre for Alternative Finance, which oversaw the work, said:
Reliable estimates of Bitcoin’s electricity usage are rare: in most cases, they only provide a one-time snapshot and the numbers often show substantial discrepancies from one model to another.
However, the most important thing is the carbon footprint of Bitcoin’s energy consumption, so the exact amount of energy being consumed is not the main issue here. If its as much as China or as much as Costa Rica, if it’s all being generated cleanly, it doesn’t matter!
The emissions associated with the electricity resources used to power the crypto-currency are what should be the focus of concern. The problem is, the mining warehouses are spread all over the world and the type of energy supply to run them varies from place to place – so, it’s very difficult to calculate the carbon footprint.
There are some Bitcoin mining firms that still rely on coal-powered energy sources in China. Meanwhile, others are choosing to switch to renewable and non-polluting sources of energy such as a mining firm in Norway which is taking its energy from nearby hydro-electric power plants. As the energy demands start to soar, all the firms will have to find a solution that is good for the planet. More mining warehouses will have to convert to renewable energy sources.
