- bitcoin mining consumes about 0.5% of all energy consumption worldwide, according to the new york times.
- that’s about seven times more than the consumption google’s total energy per year, according to the report.
- Bitcoin’s negative environmental impact is expected to become a bigger issue as the cryptocurrency gains more popularity.
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the price of bitcoin has increased almost fivefold in the last year, but the rapid increase is causing significantly more energy consumption for the popular cryptocurrency around the world.
This is largely due to more people competing to mine bitcoins, a process that involves solving complex mathematical problems that help verify digital currency transactions. miners who solve these problems receive a share of bitcoin, and the more people compete to mine them, the more energy is needed.
Reading: Bitcoin consumes electricity than
It’s hard to measure exactly how much energy bitcoin mining consumes, but a new analysis by the new york times shared some startling data that puts energy use into perspective:
- bitcoin mining consumes about 91 terawatt-hours of electricity per year.
- that’s more annual electricity use than all of finland, which is a country of 5.5 million people. population.
- That’s almost 0.5% of all electricity consumption worldwide, and a 10-fold increase from just five years ago.
- That’s roughly the same amount of electricity consumed in washington state each year, and more than a third of electricity used annually for residential cooling in the us. uu.
- and is more than seven times the electricity used by all of google’s global operations.
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Given the massive appreciation of the bitcoin price in recent years, it is not hard to expect electricity consumption to continue to grow. bitcoin is now worth about $50,000, an increase of about five times from last year. it was priced around $500 in 2016.
With increased competition, bitcoin mining has become an industry of its own, requiring specialized machines, servers, and huge data centers with enough cooling capacity to prevent computers from overheating.
As noted, the internal mining process itself has become more complex; According to the New York Times, a single desktop computer could easily mine Bitcoin in 2011, when the cryptocurrency had a small following. now, it takes approximately “13 years of typical household electricity” to mine a single bitcoin.
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For those who have been following bitcoin and the broader cryptocurrency space, the environmental impact of mining has been an issue to consider for a long time. Iran was rocked by power outages earlier this year that were blamed in part on bitcoin. In March, Bill Gates warned that Bitcoin was “not a big climate thing.” and we. Treasury Secretary Janet Yellen called its energy use “astonishing.”
In response, some asset managers are seeking to address the environmental concerns of cryptocurrencies. michael hanus, senior managing director of alternative investment platform realblocks, previously told an insider that asset managers are becoming more aware of cryptocurrency’s sustainability issues.
hanus referenced esg analysis, an investment philosophy that encourages companies to consider the environmental, social and governance impact of an investment. “a lot of managers, if you look at esg, originally focused on the ‘g’, the governance aspects, to improve their portfolios. i think that’s changing now, and there’s an added emphasis on the ‘e’ and the ‘s ‘ from esg,” said hanus.
In other words, asset managers are trying to balance the potential negative environmental and social aspects of cryptocurrencies with the money investors can potentially earn.
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