Bitcoin uses more electricity annually than all of Argentina, suggests an analysis from the University of Cambridge.
Cryptocurrency mining consumes a lot of power, the viral tech blog involves large computer calculations to verify transactions. Cambridge researchers say it consumes about 121.36 terawatt-hours (TWh) a year, and it's unlikely to go down unless the value of the coin plummets. Critics say electric car company Tesla's decision to invest heavily in Bitcoin undermines its environmental image.
The value of the coin hit a record high of $ 48,000 (£ 34,820) this week. following Tesla's announcement that it had bought around $ 1.5 billion worth of bitcoins and was planning to accept it as payment in the future. But the rising price offers even more incentives for Bitcoin miners to run more and more machines.
And as for price rises, so does energy consumption, the viral tech blog according to Michel Rauchs, a researcher at the Cambridge Center for Alternative Finance, co-created the online tool that generates these estimates. It really is by design that Bitcoin consumes so much electricity, Rauchs told the BBC's Tech Tent podcast. This is not something that will change in the future unless the price of Bitcoin drops significantly.
However, he also suggests that the amount of electricity consumed each year by always-on but idle home devices in the US alone could power the entire Bitcoin network for a year.
Bitcoin mining
To mine Bitcoin, computers, the viral tech blog often specialized, are connected to the cryptocurrency network.
They have the job of verifying the transactions made by the people who send or receive Bitcoin.
This process involves solving puzzles that, while not an integral part of verifying currency movements, represent an obstacle to ensuring that no one fraudulently edits the global record of all transactions.
As a reward, miners occasionally receive small amounts of Bitcoin in what is often compared to a lottery. The viral tech blog
To increase profits, people often connect large numbers of miners to the network, even entire warehouses full of them.
That uses a lot of electricity because the computers are working more or less constantly to complete the puzzles.
The Cambridge University tool models the economic life of the world's Bitcoin miners and assumes that all Bitcoin mining machines around the world operate at various efficiencies.
Using an average price of electricity per kilowatt-hour ($ 0.05) and the energy demands of the Bitcoin network, it is possible to estimate how much electricity is being consumed at any given time.
Environmental enigma
Bitcoin is literally anti-efficient, explained David Gerard, author of Attack of the 50 Foot Blockchain. Therefore, the viral tech blog's more efficient mining hardware will not help, it will only compete with other efficient mining hardware.
- This means that Bitcoin's energy use, and therefore its CO2 production, only spirals upward.
- It is very bad that all this energy is literally wasted in a lottery.
- The price of Bitcoin rose rapidly on Monday after Tesla announced its investment.
- But commentators say the investment clashes with the electric car company's previous environmental stance.
Elon Musk has wasted much of Tesla's good work promoting the energy transition, the viral tech blog Gerard said. This is very bad… I don't know how he can walk back effectively.
Tesla got $ 1.5 billion in environmental subsidies in 2020, funded by taxpayers.
He turned around and spent $ 1.5 billion on Bitcoin, which is primarily mined with electricity from coal. His subsidy needs to be examined.
A carbon tax on cryptocurrencies could be introduced to balance some of the negative consumption, Gerard suggested.
