Bitcoin, mining has already consumed more energy in 2021 than in all of 2020
The energy used to mine Bitcoin is already much higher this year than last year, with forecasts placing the 2021 total above 91 TWh. New research suggests that Bitcoin is on the way to consuming as much energy as Pakistan this year, and it is no coincidence that Bitcoin mining has long been under fire for the damage it causes to the environment. Proponents of Bitcoin point out the alleged benefits of cryptocurrency, for example by suggesting that the asset can act as a hedge against inflation, or even by pointing to the environmental damage that traditional currencies and financial institutions have caused over the years.
In any case, it is undeniable that bitcoin mining requires a lot of energy, but once again, the energy demands of crypto are constantly changing. Earlier this year, China’s crackdown on cryptocurrency mining marked bad news for miners, but signaled a potential win for environmental critics. In June of this year, the cryptocurrency was consuming 68 TWh. This was a far cry from previous figures of around 141 TWh, which is what Bitcoin was consuming before China’s mining ban went into effect.
But as the recent rise to 95 TWh demonstrates, the drop in cryptocurrency energy demands may have been short-lived. Before China banned mining, nearly two-thirds of all Bitcoin was mined in the Asian country. However, mining companies have since migrated to other countries, such as Kazakhstan.
Ph. Marco Verch
To find out exactly the size of Bitcoin’s carbon footprint, it is therefore necessary to convert the energy consumed into a figure of greenhouse gas emissions. According to data from the University of Cambridge, they suggest that only 39% of Bitcoin’s energy consumption demands come from renewable sources. This means 61% are powered by carbon-intensive energy. Using these figures, nearly 58 TWh of the cryptocurrency’s current energy demands are contributing to the cryptocurrency’s greenhouse gas emissions.
The Bitcoin Mining Council was created earlier this year to “promote transparency” in the sector. The council shared a presentation in July that said 56% of the electricity behind the encryption came from sustainable sources. The board cited its own “analysis, hypothesis and extrapolation” as the sole source behind the calculation and collected survey data from mining companies that accounted for less than a third of global computational power, and the responses to that survey were voluntary. hence the most environmentally damaging miners were free to skip the process altogether.