The debate about Bitcoin’s energy consumption is heating up faster than the planet, with companies facing public and shareholder pushback over Bitcoin (BTC) investment.
According to a report from Citigroup Inc. Bitcoin consumes 66 times more electricity than in 2015. It added that the carbon emissions associated with mining are likely to be increasingly scrutinized, Bloomberg said.
This claim is supported by new research from Mastercard – which has just released its own Carbon Calculator – showing that 54% of people believe that preserving the environment is more important now than it was before COVID-19.
Citigroup analysts also stated that:
“As Bitcoin’s value increases, so should its energy consumption.”
However, the grid’s electricity consumption is increasing much more slowly than its price, which has increased about 170 times over the same period.
The Citigroup report, quoting figures from the Cambridge University Center for Alternative Finance, stated that the global energy demand from the Bitcoin network reached 143 terawatt hours on an annual basis. This is about 4% higher than the total electricity production in Argentina in 2019.
The Cambridge Bitcoin Electricity Consumption Index currently estimates that Bitcoin’s annual electricity consumption is currently somewhere between that of Sweden and Malaysia at 141.6 TWh per year.
The report suggested China could tackle mining because of environmental concerns:
Mining and use of these ‘coins’ is undoubtedly energy intensive and could face more regulatory scrutiny as adoption grows, especially as the US continues to increase its crypto footprint and market leader China tackles Bitcoin mining if it sees a negative has an effect on the climate.
Bitcoin’s environmental impact has been hotly debated, with many arguments about it, either being refuted or at least proving to be much more complicated than opponents suggest. In late March, Coin Metrics co-founder Nic Carter came out with a well-founded rebuttal to some of these important claims.
In it, he stated that there is an abundance of energy in the four Chinese provinces where most of BTC mining takes place, and that much of it comes from solar, wind and hydropower. In addition, the Chinese government actually limits or locks power by removing excess energy from the grid or public consumption, often to maintain price levels.
In order to maintain profits, miners will generally use the cheapest power available. There is an annual migration to Sichuan province to take advantage of cheap hydropower during the rainy season. Studies suggest that between 39% and 76% of Bitcoin mining uses renewable energy.