Bitcoin now consumes more energy than Argentina; Energy consumption has increased by 80% in the last 15 months
Continuing its meteoric rise, the Bitcoin cryptocurrency broke above $60,000 levels for the first time on Saturday (March 13), hitting an all-time high of $60,012.
In March of last year alone, Bitcoin was trading at around $5,000. However, over the year, support from heavyweights including online payments giant PayPal and electric car maker Tesla, led by Elon Musk, led to a significant rise in the value of the cryptocurrency.
The rising value, however, also comes with a dramatic increase in its power consumption. According to a Business Intern report, Bitcoin’s energy consumption has jumped 80% since the start of 2020.
The report cites data from Cambridge’s Center for Alternative Finance, which indicates that the cryptocurrency’s estimated annualized electricity consumption at the start of 2020 was 71.07 terawatt hours, which hit an all-time high of 128 terawatt hours on March 11. of this year.
This figure exceeds Argentina’s 125.03 terawatt hours per year, according to data from the country. The data further reveals that if we rank each country by its total energy consumption, including bitcoin, the cryptocurrency would rank 29th.
Virtual currency now accounts for 0.58% of total annual global electricity consumption. What is even more worrying is that the rising price is further incentivizing Bitcoin miners to run more and more machines.
Notably, the process of “minting” Bitcoins – known as mining – involves computers timestamping transactions in a continuous chain to avoid coin duplication. These heavy computers are constantly transacting and competing for change to create the next block of transactions that will award them new bitcoins.
However, computers that do not receive these Bitcoins continue to operate, causing unnecessary power consumption.
Previously, Bill Gates also criticized Bitcoin for its environmental impact. In an interview with NYT reporters, he reportedly said, “Bitcoin uses more electricity per transaction than any other method known to mankind… It’s not good for the climate.”
Some experts have even called for some sort of “carbon tax” on bitcoin to offset its negative environmental impact, while others believe that as long as bitcoin mining uses renewable energy, it is not. not a problem.
A note on the Cambridge Center for Alternative Finance website states: “Even assuming bitcoin mining was exclusively coal-fired – a highly unrealistic scenario given that a sizable number of facilities run exclusively on renewables – total carbon dioxide emissions would not exceed 58 million tonnes of CO2, which would correspond to roughly 0.17% of total global emissions.
However, the statement adds, “This is not to say that environmental concerns about Bitcoin’s electricity consumption should be ignored. There are valid concerns that Bitcoin’s growing electricity consumption could pose a threat to achievement of the United Nations Sustainable Development Goals in the future”.