If the Bitcoin network were a country, that country would rank 29th in terms of energy consumption. The electricity consumption of Bitcoin mining worldwide is higher than that of Norway, with 5.4 million inhabitants.
How much electricity does Bitcoin mining use?
Bitcoin mining is essentially solving extremely complex algorithms. Miners, after solving these algorithms will be rewarded with Bitcoins. It is for this reason that Bitcoin mining facilities – containing series of computer systems – have sprung up around the world.
According to the Cambridge Center for Alternative Finance, as of March 18, 2021, the annual electricity consumption of the Bitcoin network is estimated at 129 TWh (1 TWh is equivalent to 1 billion kWh).
If the Bitcoin network were a country, that country would rank 29th in terms of electricity consumption. The electricity consumption of Bitcoin mining worldwide is higher than that of Norway (124 TWh), with 5.4 million inhabitants.
Not only that, the Bitcoin network also consumes 10 times more electricity than Google. But this consumption is still lower than all the data centers in the world combined. These hubs represent more than 2 trillion gigabytes of storage.
Where does the energy for Bitcoin mining come from?
In a report by the University of Cambridge, researchers found that 76% of cryptocurrency mining systems rely in part on renewable energy. However, renewables only account for 39% of the total energy consumption of cryptocurrency mining.
Hydroelectric power is the most popular energy source globally. Hydroelectricity is used by at least 60% of crypto mining systems across all four regions. Renewable energy types such as wind power and solar power appear to be less common.
Coal power plays an important role in Bitcoin mining in the Asia-Pacific region, and is the only energy source on par with hydroelectricity in terms of usage. This result is largely due to China, which is currently the world’s largest coal consumer.
Researchers from the University of Cambridge say they are not surprised by the findings, as the Chinese government’s strategy of ensuring energy self-sufficiency has led to oversupply of both hydroelectric and coal power plants.
According to experts, if cryptocurrency is widely recognized, it is likely that governments and other regulators will pay attention to the carbon footprint of this currency.
Mike Colyer, CEO of Foundry, believes that cryptocurrencies can aid the transition to global renewable energy. More specifically, he believes that clustering cryptocurrency mining facilities near renewable energy projects can reduce the renewable energy surplus.
“This allows wind and solar projects to pay back faster and doesn’t put too much pressure on the grid in that area,” said Mike Colyer.
This idea also seems to be being applied in China. In April 2020, Nha An, a city located in Sichuan, China, encouraged blockchain companies to take advantage of the excess hydropower of its factories.