Bitcoin’s high electricity consumption and its implications
The cryptocurrency Bitcoin, which is slowly becoming popular, is not a system without its shortcomings. The topic of the energy consumed by this industry and the carbon footprint that it leaves which might lead to disastrous environmental implications has been widely debated and written about.
Energy consumption and carbon emissions
The creation of Bitcoins involves “mining” coins, which requires high-tech computers to do complex calculations for an extended amount of time. The more coins one will find in the market, the longer it will be the time taken to “mine” a new coin and in this process, more electricity is consumed.
In 2017, the authorities estimated that the network ‘s consumption of electrical power was 30 terawatt-hours (TWh) each year. This rate of electricity consumption is also estimated to be increasing exponentially with estimates of the network using energy between 78TWh and 101TWh at the present moment. A research conducted by Dutch economist, Alex de Vries showed that Bitcoins can emit a carbon footprint amounting to 38.10 Mt a year.
To put things into perspective, each transaction made using Bitcoin has been approximately calculated to require on average 300kg of carbon dioxide. That is said to be equivalent to the quantity of carbon footprint that human beings can produce by swiping 750,000 credit cards. The emissions made by Bitcoin per year are at present of the same value as 7 billion charging smartphones—which can be calculated as enough energy to equal every iPhone user. Compared to Visa transactions and the use of everyday gadgets, Bitcoin’s carbon emissions thus look environmentally disastrous.
The difficulty in calculating energy consumption
There remains significant difficulty in calculating the energy consumption of the industry and putting it into comparison with the traditional banking sector. Determining energy consumption might be relatively straightforward, but figuring out the exact carbon emissions is difficult in an industry like this.
Another key factor that makes the energy consumption of Bitcoin different from other industries is the fact that Bitcoin can be mined anywhere. Bitcoin has no limitation in this respect and the energy required for it does not need to be produced relatively close to its end-user. This can allow the utilization of power sources that are otherwise inaccessible for other industries.
Bitcoin is being made more accessible to the general public who are not acquainted with the system through sites and exchange platforms like british bitcoinprofit which offer highly secure ways to make quick profits with Bitcoin, but there has been no solution yet to reduce the energy consumption of the industry. Furthermore, it is predicted that energy consumption rate will not decrease, but actually significantly increase over the years.
Divisive opinions around the problem
Bitcoin’s energy consumption and its environmental implications cannot be denied, but there has also been a considerable amount of debate regarding the industry’s comparison with the traditional banking sector. Bitcoin’s network comprises all the power that is needed to make the function- creation, security and transport.
The traditional banking sector that deals in fiat currency, however, cannot be considered one dimensional nor even clear and honest in their regulations. A payment processor like Visa is part of a wider system. The comparison should include other factors like the cost of printing money, cost of central bank servers, cost of printing money, cost of physical security and money transportation, all of which require a significant amount of energy.
It is important to note that some Bitcoin mining uses clean energy to fuel the network, mostly in areas of China where hydropower generates the majority of electricity, but most of the mining facilities are still located in regions that rely heavily on coal-based power, which is also environmentally unsustainable.
The debate around the implications of the Bitcoin industry is ongoing but the industry is also gaining traction worldwide as people in different countries are using it as a tool to escape inflation and monetary repression. Being embraced by popular figures like Elon Musk as well as the general public only points to the fact that this cryptocurrency is here to stay.