As Bitcoin and other cryptocurrencies are starting to gain more public attraction, a lot of focus has been centered around how much energy Bitcoin mining is consuming.
CBS News recently reported that Bitcoin mining was producing a level of energy consumption greater than 159 countries. It is understandable that this statement on its own might seem rather alarming, especially with the increasing concern about the usage of fossil fuels and the carbon footprint, and all the major climate change discussions.
Currently, the Bitcoin network is set to reach the annual energy consumption rate of over 31 TWh of electricity, and is showing no signs of slowing down.
Using up to 85,000,000 KWh electricity or more per day, with 250 KWh being consumed per Bitcoin transaction might make Bitcoin energy use seem quite high. However, with $10 billion USD being produced from global mining revenues, BTC’s current share of world energy might be more understandable, especially considering that this will eventually slow down, once all the currency has been mined. There is a limited supply after all.
I am not saying that the Bitcoin boom is not currently taking a lot of energy to operate. When a single Bitcoin transaction takes enough energy to power over 8 U.S. homes for a day, this fact does initially raise some alarm. But, I’m merely trying to put this into better perspective.
Bitcoin is a digital form of currency that is not yet fully understood by the masses. Therefore, without knowing what the future holds for Bitcoin, people are skeptical of its energy draw. But many educated people that are more studied in the world of this virtual currency boom argue that the introduction of Bitcoin is a historical event that will change the world as we know it. For example, the Bitcoin scholar Andreas Antonopoulos believes it will be right there in the ranks with the printing press and the Magna Carta in regards to human accomplishments.
The Bitcoin ledger is the first of its kind, in which people can make private and confidential person-to-person exchanges without censorship or permission, with no middleman required. And this kind of personal liberty, along with the widespread wealth that cryptoeconomics is generating creates a balance, offsetting its energy consumption.
Bitcoin is currently ranked 32nd in the global currency market, backed by the most physical money, making it a bit more understandable that it needs to use a lot of energy. The actual damage from Bitcoin mining is less than that used in the production of fiat currencies and other industries. For example, data centers and gold mining all consume substantially more energy than that of Bitcoin mining.
Looking at all things considered, Bitcoin consumes less energy than its non-digital counterparts.