You may have noticed by now that Bitcoin is a pretty divisive issue. There are people arguing on both sides of it, and some of them are making a real effort to distort the public understanding of Bitcoin’s energy consumption.
Take for instance Jared Huffman’s open letter urging the EPA to crack down on Bitcoin mining, signed by 22 members of congress and the source of our doomsday statements comparing Bitcoin’s energy footprint to the power consumption of Greece, or to average US households. Those figures may sound shocking at first, but it’s important to understand that they are being intentionally used to bolster an anti-Bitcoin position, and that the truth is much more nuanced, and much less worrying.
The University of Cambridge’s Judge Business School compiled a report with the intent to make Bitcoin’s energy consumption more tangible and meaningful for a diverse, general audience. At the outset, they included a disclaimer that we think sums things up nicely:
“Comparisons tend to be subjective — one can make a number appear small or large depending on what it is compared to. Without additional context, unsuspecting readers may be drawn to a specific conclusion that either understates or overstates the real magnitude and scale.
For instance, contrasting bitcoin’s electricity expenditure with the yearly footprint of entire countries with millions of inhabitants gives rise to concerns about Bitcoin’s energy hunger spiraling out of control. On the other hand, these concerns may, at least to some extent, be reduced upon learning that certain cities or metropolitan areas in developed countries are operating at similar levels.”
It stands to reason that Greece, with its relatively smaller economy and population, wouldn’t emit the highest levels of CO2. Now, New York City or London would be a different story. The point is, individual countries and economies each rely on different sets of resources to achieve success.
Bitcoin mining, on the other hand, is a fast-growing global industry which relies on electricity at a foundational level — it shouldn’t be too much of a surprise that Bitcoin produces more emissions than Greece.
You may have noticed by now that Bitcoin is a pretty divisive issue. There are people arguing on both sides of it, and some of them are making a real effort to distort the public understanding of Bitcoin’s energy consumption.
Take for instance Jared Huffman’s open letter urging the EPA to crack down on Bitcoin mining, signed by 22 members of congress and the source of our doomsday statements comparing Bitcoin’s energy footprint to the power consumption of Greece, or to average US households. Those figures may sound shocking at first, but it’s important to understand that they are being intentionally used to bolster an anti-Bitcoin position, and that the truth is much more nuanced, and much less worrying.
The University of Cambridge’s Judge Business School compiled a report with the intent to make Bitcoin’s energy consumption more tangible and meaningful for a diverse, general audience. At the outset, they included a disclaimer that we think sums things up nicely:
“Comparisons tend to be subjective — one can make a number appear small or large depending on what it is compared to. Without additional context, unsuspecting readers may be drawn to a specific conclusion that either understates or overstates the real magnitude and scale.
For instance, contrasting bitcoin’s electricity expenditure with the yearly footprint of entire countries with millions of inhabitants gives rise to concerns about Bitcoin’s energy hunger spiraling out of control. On the other hand, these concerns may, at least to some extent, be reduced upon learning that certain cities or metropolitan areas in developed countries are operating at similar levels.”
It stands to reason that Greece, with its relatively smaller economy and population, wouldn’t emit the highest levels of CO2. Now, New York City or London would be a different story. The point is, individual countries and economies each rely on different sets of resources to achieve success.
Bitcoin mining, on the other hand, is a fast-growing global industry which relies on electricity at a foundational level — it shouldn’t be too much of a surprise that Bitcoin produces more emissions than Greece.
The question isn’t as simple as, “is Bitcoin harmful to the environment?” The real question is, how much energy does Bitcoin mining consume compared to other industries?
This is where we start to see some meaningful insight take place. According to the University of Cambridge, Bitcoin consumes 147.94 TWh of electricity per year. Compare that to the energy consumption of Bitcoin’s closest real-world analogue, gold mining, which uses 131 TWh of electricity per year. Suddenly, Bitcoin mining isn’t looking quite so scary.
Bitcoin’s consumption is outpaced by the copper industry at 167 TWh, doubled by the cement industry at 384 TWh, and totally dwarfed by the iron and steel industry at 1233 TWh. In fact, Bitcoin’s annual rate of energy consumption is nearly rivaled by refrigerators in the United States alone, clocking in at 104 TWh.
Clearly, Bitcoin mining’s environmental footprint is rather pedestrian.