Bitcoin mining uses a lot of power. Analysis by Cambridge University suggested that the cryptocurrency used more electricity every year than the whole of Argentina.
Bitcoin mining requires a lot of resources because it needs a lot of computer calculations to validate transactions. According to university researchers, the operation used about 121.36 terawatt-hours (TWh) per year. Bitcoin accounts for 0.51 percent of global electricity output and 0.59 percent of overall electricity use, respectively.
According to Michel Rauchs, a researcher at The Cambridge Centre for Alternative Finance who co-created the online tool that produces these figures, as the price rises, so does energy consumption.
Is Bitcoin That Wasteful?
Any analytical argument regarding bitcoin’s energy consumption must have an additional point that contextualizes the consumption and outlines the asset’s more comprehensive benefits.
Numerous technologies and systems lead to environmental damage, but when weighed against their benefits – to the economy, financial inclusion, or human health, for example – the situation becomes less clear.
For enthusiasts of bitcoin, this energy outlay is a small cost for a censorship-resistant digital bearer asset that allows people worldwide to flee a dysfunctional centralized monetary system.
Bitcoin output is less than that of 28 countries when measured in terms of electrical output: it is wedged between Ukraine (27th) and Argentina (28th) in the league table (29th).
Although it is reasonable to question if bitcoin’s energy requirements should be comparable to those of an entire country, this must be done in the context of value. Ukraine’s GDP, for example, is about $150 billion. The total amount of all mined bitcoin is US$940 billion, which is more than Ukraine’s combined GDP and Sweden’s, which has a GDP of US$530 billion.
Let’s Talk About Utility
Tradeoffs must be made regarding energy output, whether it’s gold mining, global banking, air conditioning, the fashion industry, or something else. So it may be worthwhile to look at the types of people who profit from bitcoin in their daily lives.
Away from the markets’ frantic speculation, bitcoin is making things simpler for many people. Nigerians, like many other people in developed countries, use bitcoin to transfer money to family members.
Cryptocurrencies such as bitcoin enable users to send and receive money from anywhere in the world. There are also advantages beyond helping low-wage employees retain more of their wages, such as the opportunity to prevent global disputes or capital controls.
Bitcoin, like anything else, will become greener as renewable energy becomes more available. Bitcoin, blockchain, cryptographic currencies, and DLT protocols must all aim to – their energy use and carbon footprints.