In brief
- New research suggests Bitcoin is on course to consume as much energy as Pakistan this year.
- Bitcoin mining has long come under fire for the damage it causes to the environment.
Bitcoin's year-to-date energy consumption has already surpassed the cryptocurrency's total energy consumption in 2020, according to research conducted by Bloomberg.
“The Bitcoin network was estimated to consume about 67 TWh [terawatt hours] of electricity in 2020, and its total consumption has already surpassed this in 2021,” Bloomberg said. “By the end of this year, it looks set to have used 91 TWh of energy—as much as Pakistan,” the report added.
Bitcoin has long come under fire for its energy demands, which critics have deemed to be too high a price to pay for the cryptocurrency.
Bitcoin's advocates point to the crypto's alleged benefits—for example, suggesting the asset can act as a hedge against inflation—or even by pointing to the environmental damage traditional currencies and financial institutions have caused over the years.
Bitcoin's energy use
Bitcoin's energy consumption is often calculated in TWh, a unit of energy that equates to one trillion watts per hour. It is often used to track the annual consumption of entire countries.
This figure isn’t a constant either. As Bloomberg reported, its annualized consumption for 2020 was 67 TWh. Yesterday—when Bloomberg's research was released—it was 91 TWh. Today, it is 95TWh.
That's a lot of energy—but again, the crypto's energy demands are in constant flux. Earlier this year, China's crackdown on crypto mining spelled bad news for miners but signaled a potential win for Bitcoin's environmentally-minded critics.
In June of this year, the crypto was consuming 68 TWh. This was a far cry from previous figures of approximately 141 TWh—which is what Bitcoin was consuming before China's mining ban began to bite.
But as the recent increase back to 95 TWh shows, the crypto's declining energy demands may have been short-lived. Before China banned mining, nearly two-thirds of all Bitcoin was mined in the country.
Since then, mining firms have migrated to other jurisdictions like Kazakhstan.
Measuring the carbon footprint
To find out exactly the size of Bitcoin's carbon footprint, you need to convert the energy consumed to a figure of greenhouse gas emissions.
The best available data from Cambridge University suggests that only 39% of Bitcoin's energy consumption demands come from renewable sources. That means 61% is being fuelled by carbon-intensive energy.
Using those figures, almost 58 TWh of the crypto's current energy demands are contributing to the cryptocurrency's greenhouse gas emissions.
That means, today, Bitcoin is emitting more greenhouse gas than what you emit if you burned 4.6 billion gallons of gasoline, drove 8.9 million passenger vehicles for a year, or took just one of those vehicles for a 103 billion mile trip (enough to take you to Pluto over 20 times).
What do Bitcoin's defenders say?
Some of Bitcoin's most ardent defenders have tried to paint Bitcoin as green as possible.
The Bitcoin Mining Council was created earlier this year to “promote transparency” about the industry. The Council shared a presentation in July that claimed 56% of the electricity behind the crypto came from sustainable sources.
The council cited its own “analysis, assumptions, and extrapolation” as the sole source behind the calculation, and collected survey data from mining companies that represented less than a third of the global hash power behind Bitcoin.
What's more, responses to that survey were voluntary, so the most environmentally damaging miners were free to skip the process altogether.