The Bitcoin network was estimated to consume about 67TWh of electricity in 2020, and its total consumption has already surpassed this in 2021. By the end of this year, it looks set to have used 91TWh of energy – as much as Pakistan, according to a research report published by Bloomberg.
As the price of Bitcoin increases, more miners with less energy-efficient machines join the network, driving up energy use. This means that it is essential to improve the efficiency of crypto-mining and move to low-carbon energy sources for electricity.
Environmentalists have also warned that carbon emissions from power-intensive bitcoin mining could harm sustainability efforts.
In May, one of the most vocal proponents of cryptocurrencies, Tesla Chief Executive Officer (CEO) Elon Musk said that the company has suspended the use of bitcoin to purchase its vehicles because of climate concerns.
Bitcoin mining is a process of creating a new coin that involves using computers to solve complex mathematical algorithms or puzzles. The cryptocurrencies are based on a decentralized network that need to be mined. The software that mines bitcoin is designed to take on average about 10 minutes for those on the network to solve the complex program and process a block.
The process ends up using a massive chunk of electricity as giant and powerful systems are used by miners to mine blocks and verify transactions. The vast majority of Bitcoin’s energy consumption happens during the mining process. As a reward for their services, miners receive newly created bitcoins along with transaction processing fees.
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