A UN report has established a compelling connection between Bitcoin's price and its energy consumption. The study reviewed Bitcoin mining in 76 nations between 2020 and 2021, revealing that the network used 173.42 terawatt-hours of electricity during this period. Notably, as Bitc...
A UN report has established a compelling connection between Bitcoin's price and its energy consumption. The study reviewed Bitcoin mining in 76 nations between 2020 and 2021, revealing that the network used 173.42 terawatt-hours of electricity during this period. Notably, as Bitcoin's price surged by 400% between 2021 and 2022, the global network's energy consumption rose by 140%, according to cointelegraph.
Fossil fuels still dominate Bitcoin's energy mix, accounting for 67% of its electricity usage. However, the industry has been gradually shifting toward renewable energy sources. Hydropower alone met over 16% of Bitcoin's electricity needs, while nuclear, solar, and wind energy contributed 9%, 2%, and 5% respectively.
The UN report has drawn criticism for referencing the Mora et al. 2018 paper, which allegedly overestimated the environmental impact of Bitcoin mining by including unprofitable rigs. Despite this, the report identifies the top 10 Bitcoin mining nations—China, the United States, Kazakhstan, Russia, Malaysia, Canada, Germany, Iran, Ireland, and Singapore—as being responsible for 92% to 94% of Bitcoin's global carbon, water, and land footprint.
Consequently, there is a growing global push for sustainable energy options to mitigate Bitcoin's environmental effects. Genesis Digital Assets Limited recently inaugurated a data center in Sweden powered by the country's surplus renewable energy. Additionally, countries like Sweden, Finland, and Norway offer not just surplus energy but primarily renewable options, highlighting a shift in the industry's approach to sustainability.
Manufacturers of Bitcoin mining equipment are also focusing on eco-friendly solutions. Bitmain launched its efficiency-focused Antminer S21, and plans to facilitate the decarbonization process were discussed at the World Digital Mining Summit.
In summary, while Bitcoin's skyrocketing prices have led to increased energy consumption, the industry is actively seeking greener alternatives. Although renewable energy adoption is in its nascent stages, it is becoming a key focus for both miners and policymakers aiming to reconcile cryptocurrency's financial promises with its environmental obligations.