Surge in Bitcoin energy consumption sparks debate in crypto community
The recent surge of Bitcoin (BTC) price has driven notable growth in the amount of electricity consumed by Bitcoin miners, spurring another wave of argument in the community over the ecology of the seminal cryptocurrency.
According to the latest data from Digiconomist’s Bitcoin Energy Consumption Index, Bitcoin energy consumption has been at its highest historical levels since late 2020, with the estimated annual consumption level staying above 75 TWh for a record period of time.
Bitcoin is now estimated to consume around 77.8 TWh per year, which is as much power as consumed by Chile. Bitcoin’s carbon footprint — the total greenhouse gas emissions caused by BTC mining activity — reportedly amounts to nearly 37 megatons of CO2 annually, comparable to that of New Zealand.
As Bitcoin’s electricity consumption has exceeded “normal” levels since November, the crypto community remains divided over concerns about its carbon footprint.
Charles Hoskinson, founder of Cardano and a co-founder of Ethereum, believes that Bitcoin is consuming an “unfathomable amount of electricity.” “The issue is, it can never get better by design,” Hoskinson told CNBC Friday, emphasizing that Bitcoin’s proof-of-work consensus will only make energy consumption grow further with time:
“The more successful bitcoin gets, the higher the price goes; the higher the price goes, the more competition for bitcoin; and thus the more energy is expended to mine.”
Hoskinson said that the Cardano network consumes only 6 GWh of power as it relies on a proof-of-stake consensus mechanism alongside other blockchains like Polkadot and Algorand.
Some crypto community members believe that Bitcoin’s unique features are worth its energy consumption. CoinShares chief strategy Meltem Demirors hinted that Bitcoin’s energy consumption is a good use of energy:
“What we have here is people trying to decide what is or is not a good use of energy, and bitcoin is incredibly transparent in its energy use while other industries are much more opaque.”
Demirors also noted that energy use in itself is not bad. “Sending and storing emails uses energy. Yet, we don’t infer email to be bad because it consumes energy,” she said.
Despite Bitcoin’s growing energy use, it still consumes less energy than that wasted on inactive home appliances in the United States, according to Michel Rauchs, research affiliate at the Cambridge Centre for Alternative Finance. The amount of energy wasted on idle home devices like microwaves in the U.S. could power the Bitcoin network for two years, Rauchs said.Source