- A new report provides information on Bitcoin’s power consumption per transaction and states that the network consumes more than 77.78 terawatts every hour.
- The report also states that Bitcoin’s carbon footprint of 36.96 million tons CO2 is as high as that caused by New Zealand.
A report on Bitcoin’s energy consumption has caused controversy in the crypto community. The study was published by Sarah Knapton, Science Editor for the UK Telegraph. Ripple’s CEO, Brad Garlinghouse, used the data in the report to criticize the cost of keeping the Bitcoin and Ethereum networks active.
Bitcoin and Chile consume the same amount of energy
The report begins by stating that a Bitcoin transaction demands the same amount of energy as that used by a British household in two months. In addition, the report goes on to state that a single Bitcoin transaction has the same carbon footprint as 780,650 from Visa. The data was provided by Alex de Vries, a blockchain specialist at PwC.
Vries is the founder of the Digiconomist blog, a website founded to raise awareness of the impact of cryptocurrencies in the real world. The blog offers interesting facts about Bitcoin’s energy consumption. For example, in the graph below it can be seen how Bitcoin’s estimated power consumption has been steadily increasing since December 2018, after experiencing a sharp drop after reaching an estimated 73.21 Terawatts per hour (Twh). The drop coincides with the bear market that the price of Bitcoin experienced during 2018, after falling from its all-time high of USD 20,000.
In addition, the graph shows that recently Bitcoin’s estimated energy consumption reached a new all-time high of 77.78 Twh which corresponds to Chile’s total electricity consumption. According to the report, Bitcoin’s “high energy footprint” gained notoriety a few years ago:
(…) when the Bitcoin bubble burst in 2018, sending prices tumbling from a high of almost $20,000 (£15,600) at the end of 2017 to below $4,000 (£3,135), consumption also crashed and has only recently started soaring again….
According to Digiconomist, Bitcoin’s carbon footprint is 36.95 million tons CO2 and is also comparable to New Zealand’s. In addition, the electronic waste generated by the use of Bitcoin is 10.74 kt or the same amount as Luxembourg. Brad Garlinghouse, CEO of Ripple, was surprised by the figures in the report. Garlinghouse commented via his Twitter account:
Energy consumption for BTC and ETH mining is a massive waste and there’s no incentive to take responsibility for the carbon footprint. Absolutely (shocking) that this isn’t high on the agenda for the growing climate crisis…
Digiconomist data shows that the estimated energy consumption of the Ethereum is only 8 Twh. Although this is only 10% of the estimated consumption for Bitcoin, it is part of the reason why Ethereum is transitioning from a Proof of Work to a Proof of Stake with Ethereum 2.0. Ripple’s CEO attacked both cryptocurrencies regardless of the data and received mixed responses from the community. The miner Primetime, gave a response and said:
Do the maths mate. Most of us use S9s which are ~1500 watts. At $8.7k BTC we make a loss buying conventional. Show me where I can buy conventional power at 4c or less. Reality is renewable power after capex is free to use so if you want to be competitive thats the road.
Thus, the data offered by Digiconomist can be questioned. The blog does not make a distinction between the different mining equipment and the type of energy that can be used by the miners. On the contrary, they are used to establish that the Bitcoin network is unsustainable. However, the blog also states that Bitcoin only accounts for 0.35% of the planet’s total energy consumption. The blog states the following:
The Bitcoin Energy Consumption Index was created to provide insight into this amount, and raise awareness on the unsustainability of the proof-of-work algorithm.