Bitcoin consumes almost half as much electricity as the UK
In the first years of Bitcoin, mining did not require that much consumption of electricity. Now, with the growing interest and investments in cryptocurrencies, the electricity consumption of Bitcoin can be compared with those of medium-sized European countries.
Why does Bitcoin mining consume so much energy?
Buying and selling cryptocurrencies doesn't seem like a complex process, as people can use digital exchange platforms, such as Binance, to easily trade from their phones. However, mining Bitcoin and verifying transactions requires the use of a "proof-of-work algorithm", which is performed by very sophisticated computers that solve complex math problems.
Due to this, big amounts of energy are used for this process daily. The energy is mainly sourced from fossil fuels, for which the Cambridge Bitcoin Energy Consumption Index is raising awareness of the enormous carbon footprint that Bitcoin leaves. This is caused by the decentralised structure of Bitcoin, which requires a lot of energy for every transaction made, compared to centralised networks. In January 2021, Bitcoin reached 400,000 daily transactions.
Is Bitcoin a dirty currency?
With its current state of energy consumption and if it was a country, Bitcoin would be included in the top 30 countries in the world for energy use. Based on the calculation from Cambridge Bitcoin Electricity Consumption Index, Bitcoin mining consumes 133.68 TWh a year of electricity. In fact, this is almost half of the annual electricity consumption of the UK, meaning that 47.8% of the country can be powered by the energy used by Bitcoin. This results in an estimated 34 megatons of carbon emissions released in the air and raises concerns about the effects it has on the environment. At the moment, only 39% of Bitcoin mining is powered by green energy.
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Abi Fawcus is a freelance UX Consultant, Website Designer, Logo Designer and Graphic Designer based in Woodbridge, Suffolk. Contact me for more information.