Demystifying Bitcoin’s energy consumption: How much does it really use?
Many people show concerns about the Bitcoin’s energy consumption, but facts say it’s nothing to worry about
Introduction: Why does Bitcoin need power?
It’s no secret that Bitcoin mining is a power-intensive activity.
ASIC miners are advanced machines that run trillions of calculations per second to maintain and secure the Bitcoin network, and they require an enormous amount of electricity to do so.
The electricity required to maintain the entire Bitcoin network depends exclusively on these machines’ power consumption and energy efficiency.
Nevertheless, as Bitcoin keeps growing in popularity and adoption, so does mining. Over the years, hardware manufacturers have come up with ever more efficient machines able to produce more hashrate with less electricity.
Technological advancements have greatly improved the energy efficiency of Bitcoin. Additionally, if we factor in the level of adoption we’re seeing, electricity consumption becomes insignificant on a global scale.
Let’s look at some numbers.
Bitcoin electricity consumption
According to the Bitcoin Mining Council — a Bitcoin miners’ organization that represents one-third of the total hashrate — , the entire network uses 188 TWh.
Meanwhile, it is estimated that the planet produces a total of 154,620 TWh.
That means that all Bitcoin miners worldwide run with 0.12% of the world’s generated energy.
Furthermore, it’s also believed that about 50,000 TWh of electricity is lost or wasted due to inefficiencies. That’s enough to power the whole Bitcoin network 263 times.
Essentially, Bitcoin’s energy consumption is so insignificant that if we found a way to reduce our electricity wastes due to inefficiencies by 0.38%, we would cover the entire network’s power needs.
Comparing Bitcoin’s power usage to other countries and industries
To add more clarification, let’s put this data into perspective.
We’ve seen Bitcoin only uses 0.12% of the world’s electricity, but how does it compare to particular countries? As you can see below, the Bitcoin mining energy usage is still tiny compared to large and medium countries individually.
Canada, the smallest country from this list in terms of population — 38.2 million — uses 20 times more electricity than Bitcoin. In other words, only 4.96% of Canada’s electricity could power all the Bitcoin miners in the world.
Now, you might have heard that Bitcoin uses more energy than some countries, like Switzerland. However, when taking a deeper look at those statements, it’s not surprising.
Switzerland has only 8.6 million inhabitants and uses a very low 63 TWh. In fact, many industries and popular hobbies also consume more electricity than the country.
Let’s compare Bitcoin to those activities now.
As data suggests, Bitcoin mining energy usage is still insignificant compared to a wide range of other industrial and commercial activities. Even more so, it uses less electricity than holiday decorations or video games.
A particular case worth highlighting is the financial and insurance industry. The current banking system devours a total of 4,939 TWh — 26 times higher than Bitcoin’s 188 TWh.
Powering the entire Bitcoin network — which functions all around the world, 24/7, and with zero downtimes — only needs 3.8% of traditional banks’ electricity. And those are only open until 5 PM.
Summing up
Yes, Bitcoin mining is an energy-intensive activity; and yes, it’s a very high amount for domestic levels.
However, zooming out and seeing Bitcoin as what it is — a global, peer-to-peer, open financial network available to everyone with an internet connection — the power needed to keep it secure and running is insignificant.
Moreover, with technological advancements accelerating and new, more efficient mining hardware being released regularly, there’s reason to believe Bitcoin will only become more efficient with the passing years.
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