7 October 2022
Bitcoin’s Energy Consumption Jumps 66 Times More Than in 2015, says Citigroup
Amid the growing traction of the crypto industry, energy consumption is also growing exponentially. Currently, Bitcoin is consuming 66 times more electricity than it did in 2015, says Citigroup.
The carbon emissions associated with mining will also face a strict inspection, according to Bloomberg. This claim is backed up by new research from Mastercard, which released its Carbon Calculator, which reveals that 54% of people believe that preserving the environment is more critical now than pre-COVID-19.
Citigroup also stated that:
“As the value of Bitcoin rises, so should its energy consumption.”
However, the network’s energy usage is rising very slowly compared to its price, which has increased by 170 times over the same period.
To date, global power demand by the Bitcoin network probably reached an annualized 143 terawatt-hours. This is about 4% higher than Argentina’s total electricity generation in 2019, the report stated, citing numbers from the Cambridge University Center for Alternative Finance. The Cambridge Bitcoin Electricity Consumption Index (CBECI) presently estimates Bitcoin’s annual electrical energy consumption somewhere between Sweden and Malaysia at 141.6 TWh annually.
The report also predicted that China might soon crackdown on mining due to environmental issues:
“Mining and use of these ‘coins’ is undoubtedly energy-intensive and could face greater regulatory scrutiny as adoption expands, especially if the U.S. continues to scale its crypto footprint and market-leader China cracks down on Bitcoin mining if it adversely impacts its climate goals,”
The environmental effect of Bitcoin has been debated, with many arguments about it either refuted or at least revealed to be much more complicated than opponents recommend. Coin Metrics co-founder Nic Carter also produced a well-researched rebuttal to a few of these key claims in late March.
He stated that energy is abundant in the four Chinese provinces where most of the BTC mining occurs, and a majority of it is derived from solar, wind, and hydropower. Additionally, the Chinese government is reducing or sequestering electricity by removing excess energy from the grid or public consumption, often maintaining price range.
To maintain profits, miners will use the cheapest energy available. There is an annual shift to Sichuan province to benefit from low-cost hydroelectric energy in the rainy season. Studies suggest that between 39% and 76% of Bitcoin mining uses renewable energy.
Disclaimer: The author’s views and opinions are for informational purposes only and do not constitute financial, investment, or other advice.