Opinion: Fears over rising energy consumption of the Bitcoin network are exaggerated

Mining experts say concerns about the environmental impact of electricity use in Bitcoin mining are exaggerated. Insider reports.

The issue has again come to the fore amid a multi-fold rise in Bitcoin’s price over the past year.

According to Cambridge University, the current annual electricity consumption for Bitcoin mining exceeds the energy expenditure of all of Argentina and is 121.36 TWh. Digiconomist estimates this figure at 82.03 TWh, comparable to Chile’s energy consumption.

Miners say they are gradually switching to renewable energy sources, but there is no official data confirming the scale of this process.

Dan Held, Kraken’s head of business development, argues that critics of energy-intensive Bitcoin mining simply do not like the cryptocurrency itself.

“People who oppose cryptocurrency think that any energy consumption by Bitcoin miners is wasteful,” he said.

As technology advances, the amount of energy required for mining will inevitably increase, adds Held. He estimates that the existing banking system uses more than 650 TWh per year. However, calculating the exact energy consumption of both the Bitcoin network and the traditional financial system is difficult:

“It is hard to account for every factor. If you consider air conditioning in a bank branch as part of the overall energy consumption of the financial system, then one could argue that the electricity used to power a Bitcoin trader’s mobile phone should be counted when calculating the energy consumption of the Bitcoin network,” the expert reasons.

Bitcoin miners have a financial incentive to use the cheapest electricity, and often utilise surplus energy that would otherwise go to waste, says Mason Jappa, CEO of Blockware Solutions.

He added that some mining centers in the United States use part of natural gas that would otherwise be flared. This prevents fuel emissions into the atmosphere.

On the other hand, many miners still rely on cheap coal, Northern Data CEO Arush Tillenanatan says. He estimates that in China, where more than 50% of mining capacity is located, a large share of Bitcoin production is achieved using coal.

Tilenatan suggested that as profitability of Bitcoin production grows, miners will switch to renewable energy sources. Northern Data’s mining facilities in Norway, Sweden and Canada already use only renewable energy.

“I believe in Bitcoin. It is a great way to preserve your wealth. But as infrastructure providers, we must be as environmentally friendly as possible,” Tillenanatan explained.

The expert added that mining with “dirty energy” is not sustainable in the long term. He expects governments to take strict measures against the use of coal-fired power plants in the future.

Earlier, Microsoft co-founder Bill Gates stated that more energy is required for a single Bitcoin transaction than for any other payment method, and this has a negative impact on the global climate.

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