Bitcoin’s power consumption continues to rise.
The Bitcoin network uses an estimated 121 terawatt hours (TWh) of electricity per year – more energy than countries like Argentina and the United Arab Emirates use annually.
Statistics published in the University of Cambridge’s Bitcoin Electricity Consumption Index have raised questions about the cryptocurrency’s potential environmental cost when the value of one bitcoin hit a price surge of $ 60,000 on Wednesday.
The Cambridge Index estimates the total energy consumption of Bitcoin by analyzing the current network hashrate (number of cryptographic calculations performed per second), the income from mining Bitcoin blocks, the average electricity costs, and the energy efficiency of both mining hardware and Bitcoin data centers .
What it shows is an energy-consuming network that competes with entire nations.
And with the price of Bitcoin, the energy requirements of the cryptocurrency also increase.
Electric car company Tesla’s recent announcement that it will buy $ 1.9 billion worth of Bitcoin has helped lift cryptocurrency prices to new levels. However, investors have already raised concerns about how the large Bitcoin investment fits with the company’s focus on renewable energy.
Ben Dear, CEO of multi-billion dollar sustainable investment firm Osmosis Investment Management, which holds Tesla shares, said it was important for Tesla to include bitcoin in future energy usage reports.
“We are of course very concerned about the carbon dioxide emissions from Bitcoin mining,” Dear told Reuters.
“We hope that once the Bitcoin ventures are complete, Tesla’s Bitcoin companies will focus on measuring their full range of environmental factors and passing them on to their market. If they continue to buy bitcoin or actually start mining bitcoin, they will include the relevant energy usage data in this disclosure. “
Bitcoin’s carbon footprint, like total energy consumption, can only be estimated – and even then the headlines vary widely.
In a 2019 research report by UK cryptocurrency investment firm Coinshares, the amount of renewable energy used to power Bitcoin was set at 73 percent (with an error rate of 5 percent), which is mostly hydropower in China Thanks to the Sichuan Region, it is estimated that more than 50 percent of the world’s mining took place.
In contrast, a 2018 paper by the Cambridge Center for Alternative Finance estimated that renewable energies accounted for less than 30 percent of the energy used by Bitcoin miners.
Australia generated 265 TWh of electricity in 2019 – enough to power the entire Bitcoin network twice. Only 21 percent of this was generated from renewable sources.