The devastating economic impact of the novel coronavirus pandemic is an unprecedented disaster for global markets, with the world almost certainly plunging into a yearslong worldwide recession. This almost entirely unanticipated interruption to business as usual has some silver linings, however. For decades, world leaders and environmental and climate scientists have been paying a lot of lip service to the need for a global energy transition toward cleaner forms of power, but the momentum of the economic status quo has proven extremely difficult to slow. There have been some strides made, yes, but as a global community, we have missed every mark set by the Paris climate accord and experts like the Intergovernmental Panel on Climate Change. So when the global economy and nearly all of international industry and its globe-spanning supply chains were derailed earlier this year, many world leaders saw it as a once-in-a-lifetime opportunity to redesign our future. The World Economic Forum has written think piece after think piece advocating for a “new energy order” and a “great reset.”
With this backdrop, lots of industries have received increased and renewed scrutiny as to the greenness of their own business practices and overall ecological footprints. One such company is the quintessential cryptocurrency wunderkind Bitcoin, that has recently come under fire for it’s staggeringly large–and growing–levels of energy consumption.
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Earlier this year Oilprice reported on “Bitcoin’s Shocking Energy Consumption,” writing that the company “has an annual energy footprint slightly larger than the entire nation of Switzerland.” Unfortunately for Bitcoin, this era of increased criticism for over-consuming companies happened to coincide with the creation of an online tool that allows users to compare the mind-boggling energy consumption of Bitcoin to other entities (such as Switzerland), released by the University of Cambridge last year. At the time that this platform debuted, the tool estimated that “Bitcoin is using around seven gigawatts of electricity, equal to 0.21% of the world’s supply,” according to a BBC report.
Now, just this week, Engadget released another damning report on Bitcoin’s energy footprint–which is still increasing. “Turns out that plugging a bunch of computers into our electrical grid that do nothing but draw current and hash through algorithms has had some negative environmental impacts,” the article begins with a wry smirk. “Recent studies suggest that Bitcoin-related power consumption has reached record highs this year — with more than seven gigawatts of power being pulled in the pursuit of the suspect digital currency.”
The Engadget article references a brand new study released Monday from the Cambridge Center for Alternative Finance, which “estimates that the global bitcoin mining industry uses 7.46 GW, equivalent to around 63.32 terawatt-hours of energy consumption. The study also notes that miners are paying around $0.03 to $0.05 per kWh this year. Given that a March estimate put the cost to mine a full bitcoin is around $7,500, the average miner still stands to make over $4,000 in profit from the operation.”
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This report takes into account Bitcoin mining operations as small as one computer in some nerd’s basement to “50,000 state-of-the-art rigs installed in a Kazakhstan warehouse,” which all suck up a huge amount of power from the grid when added together. “The current total amount of processing power dedicated to mining, known as the hashrate, is currently hovering around 120 exahash per second (EH/s). However, industry analysts argue that that figure is soon to increase.” To put this in perspective, that is the mind-blowing equivalent of seven nuclear plants, or 21.8 million solar panels worth of production.
And that’s just for now. “By our assessment, the Bitcoin network can exceed 260EH/s in Hashrate in the next 12–14 months,” a July study from Bitooda reads. “Led by a modest increase in available power capacity from 9.6 to 10.6GW and an upgrade cycle that will replace older generation S9 class rigs with newer S17 and next-generation S19 class rigs.”
