Surge in Bitcoin energy consumption sparks debate in crypto community

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The recent rise in the price of bitcoin (BTC) has led to a notable increase in the energy consumption of bitcoin miners, triggering a new wave of public debates about the ecology of cryptocurrencies.

According to the latest data from Digiconomist’s Bitcoin Energy Consumption Index, bitcoin’s energy consumption is at its highest historical level since the end of 2020, with an estimated annual consumption of over 75 TWh for a record period.

It is estimated that bitcoin currently consumes about 77.8 TWh per year, which is equivalent to the electricity consumption of Chile. Bitcoin’s carbon footprint, the total greenhouse gas emissions caused by bitcoin mining activities, would be nearly 37 megatonnes of CO2 per year, a level comparable to New Zealand’s.

Source: Bitcoin digicon energy consumption index

Surge in Bitcoin energy consumption sparks debate in crypto community

Although bitcoin’s energy consumption has been above normal since November, the crypto community remains concerned about bitcoin’s carbon footprint.

Charles Hoskinson, founder of Cardano and co-founder of Ethereum, thinks bitcoin consumes an unfathomable amount of energy. The problem is that, by design, it can never get better, Hoskinson told CNBC on Friday, noting that the proof-of-work bitcoin consensus will only increase power consumption over time:

The more successful bitcoin is, the higher the price; the higher the price, the more competition for bitcoin, and thus the more energy spent mining it.

According to Hoskinson, the Cardano network consumes only 6 GWh of electricity because it relies on a consensus confirmation mechanism, just like other blockchains like Polkadot and Algorand.

Some in the crypto community believe that bitcoin’s unique features are worth the energy consumption. Meltem Demiror, senior strategy of CoinShare, stated that Bitcoin’s power consumption is a good use of energy:

We’re dealing with people trying to decide what is and isn’t a good use of energy, and bitcoin is incredibly transparent about energy use, while other industries are much more opaque.

The Demisors also noted that energy consumption in itself is not bad. Sending and storing emails consumes energy. But we shouldn’t conclude that email is bad because it consumes energy, she added.

Despite bitcoin’s rising energy consumption, it still uses less energy than idle devices in the U.S., according to Michel Rauchs, a researcher at the Cambridge Alternative Finance Center. According to Rauchs, the amount of energy wasted by unused household appliances like microwaves in the US could power the Bitcoin network for two years.

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Emilia James
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