The recent rise in the price of Bitcoin (BTC) has led to a marked increase in the amount of electricity that Bitcoin miners consume, sparking a new wave of debate in the community over the original cryptocurrency environment.
According to the latest data from the Digiconomist Bitcoin Energy Index, Bitcoin energy consumption has reached an all-time high since the end of 2020, with an annual consumption level of more than 75 terawatt hours in a record period.
It is estimated that Bitcoin uses around 77.8 TWh per year, which equates to the energy consumed by Chile. Bitcoin’s carbon footprint – total greenhouse gas emissions from BTC mining – is reported to be around 37 megatons of carbon dioxide per year, which is comparable to New Zealand.
Source: Digiconomist Bitcoin Energy.
As Bitcoin’s energy consumption has exceeded “normal” levels since November, the cryptocurrency community still shares its concerns about the carbon footprint.
Charles Hoskinson, founder of Cardano and co-founder of Ethereum, believes that Bitcoin is consuming an “unimaginable amount of power”. “The problem is that design can never get better,” Hoskinson told CNBC on Friday, stressing that Bitcoin’s evidence of a consensus of workers will increase energy consumption over time:
“The more successful Bitcoin becomes, the higher the price; the higher the price, the greater the competition for Bitcoin; and thus I use more energy.”
Hoskinson said the Cardano grid uses only 6 gigawatt hours of energy because it relies on a consensus mechanism along with other blockchains like Polkadot and Algorand.
Some members of the crypto community believe Bitcoin’s unique features justify the power consumption. Meltem Demirors, CoinShares’ chief strategist, suggested that Bitcoin’s energy consumption is a good use of energy:
“What we have here is that people are trying to determine whether or not energy use is good, and Bitcoin is incredibly transparent when it comes to energy use, while other industries are more ambiguous.”
Demirors also note that energy use is not bad in and of itself. Sending and storing email requires energy. But we don’t think email is bad because it consumes energy. ”
Although Bitcoin’s energy consumption has increased, it still uses less energy than sleep machines in the United States, according to Michel Rauchs, a researcher at the Cambridge Center for Alternative Finance. Rauchs said the amount of energy wasted on dormant home appliances like microwaves in the United States could power the Bitcoin network for two years.