Record run equals record consumption – Bitcoin’s CO2 emissions divide minds
Bitcoin has never consumed so much electricity over such a long period of time. A dispute over environmental sustainability is attached to this.
The current record run of Bitcoin (BTC) also ensures increased competition among crypto miners. This in turn causes them to consume excessive amounts of electricity, which has now sparked a debate in Bitcoin Code the crypto community about the sustainability and environmental impact of the market-leading cryptocurrency.
As Digiconomist’s Bitcoin Energy Consumption Index shows, Bitcoin’s electricity consumption has also been at a record high since the end of 2020. For example, the estimated annual consumption since then is more than 77 terawatt hours (TWh). Although similarly high peaks have been reached in the past, this is the first time such a value has been recorded over a longer period.
The almost 77.8 TWh per year that Bitcoin is currently „eating“ is comparable to the entire consumption of the South American country Chile within one year. The resulting carbon footprint of the crypto market leader is accordingly staggering, amounting to almost 37 megatonnes (Mt), which is equivalent to the CO2 emissions of New Zealand.
This excessive emission is once again sparking debate in the crypto community about how environmentally sustainable the market-leading cryptocurrency really is.
Charles Hoskinson, the founder of the Cardano crypto project and a former co-founder of Ethereum, attests to Bitcoin’s „incredibly high power consumption“. To make matters worse, in his view, „this problem will never be solved because of the way it is designed“. As Hoskinson explains to CNBC, the Proof-Of-Work (PoW) consensus mechanism is responsible for this. Since this mechanism is fundamentally anchored to the Bitcoin blockchain, there would be no prospect of improvement; on the contrary, the problem would only worsen as the crypto market leader gains more adoption:
„The more successful Bitcoin becomes, the higher the price goes. The higher the price goes, the more competition there is among Bitcoin miners. The more competition there is, the more energy is used for mining.“
Hoskinson counters that the Cardano blockchain only requires 6 gigawatt hours (GWh) to operate because it is based on the so-called Proof-Of-Stake (PoS) consensus process, which is far less resource intensive.
Other voices in the crypto community, however, argue that the Bitcoin phenomenon, with all its revolutionary potential, certainly justifies exceptionally high power consumption. Meltem Demirors, the chief strategist of CoinShares, also takes this line, seeing the debate more as a battle for interpretive sovereignty:
„Some people want to determine what is good and what is bad electricity consumption. Bitcoin is far more transparent about that in terms of power consumption than most other industries.“
To this end, she adds that a debate about power consumption also inevitably means a debate about purpose, thus causing critics to question the legitimacy of Bitcoin as a whole: „When we write and store emails, that also consumes power, but no one would think that’s a bad form of power consumption.“
So although Bitcoin’s required energy use is not going down anytime soon, the crypto market leader uses less electricity than unused, but connected, household appliances in the US. As a study by Michel Rauchs, a researcher at the Cambridge Centre for Alternative Finance, shows, the Bitcoin blockchain could run for two years on the electricity drawn by these devices alone.