Visualizing the âĄPower Consumption of Bitcoin Mining
Cryptocurrencies have been some of the most talked-about assets in recent years, with Bitcoin and Ethereum prices reaching record highs November 2021. These gains were driven by a flurry of announcements, including increased adoption by businesses and institutions.
Lesser known, however, is just how much electricity is required to power the Bitcoin network. To put this into perspective, weâve used data from the University of Cambridgeâs Bitcoin Electricity Consumption Index (CBECI) to compare Bitcoinâs power consumption with a variety of countries and companies.
Vizualized
Why Does Bitcoin Mining Require So Much Power?
When people mine bitcoins, what theyâre really doing is updating the ledger of Bitcoin transactions, also known as the blockchain. This requires them to solve numerical puzzles which have a 64-digit hexadecimal solution known as a hash.
Miners may be rewarded with bitcoins, but only if they arrive at the solution before others. It is for this reason that Bitcoin mining facilitiesâwarehouses filled with computersâhave been popping up around the world.
These facilities enable miners to scale up their hashrate, also known as the number of hashes produced each second. A higher hashrate requires greater amounts of electricity, and in some cases can even overload local infrastructure.
Putting Bitcoinâs Power Consumption Into Perspective
On March 18, 2022, the annual power consumption of the Bitcoin network was estimated to be 129 terawatt-hours (TWh). Hereâs how this number compares to a selection of countries, companies, and more.
Sources: Cambridge CAF
If Bitcoin were a country, it would rank 29th out of a theoretical 196, narrowly exceeding Norwayâs consumption of 124 TWh. When compared to larger countries like the U.S. (3,989 TWh) and China (6,543 TWh), the cryptocurrencyâs energy consumption is relatively light.
For further comparison, the Bitcoin network consumes 1,708% more electricity than Google, but 39% less than all of the worldâs data centersâtogether, these represent over 2 trillion gigabytes of storage.
Towards a Greener Crypto Future
As cryptocurrencies move further into the mainstream, itâs likely that governments and other regulators will turn their attention to the industryâs carbon footprint. This isnât necessarily a bad thing.
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