The Bitcoin energy consumption debate is heating up faster than the planet, with corporations facing pushback from the public and shareholders over Bitcoin investments.
According to a Citigroup Inc. report, Bitcoin is consuming 66 times more electricity than it did in 2015. It added that the carbon emissions associated with mining will likely face increasing scrutiny, according to Bloomberg.
This assertion is backed up by new research from Mastercard — which just released its own Carbon Calculator — that shows 54 percent of people believe that preserving the environment is more important now than it was pre-COVID-19.
Citigroup analysts also stated that:
“As the value of Bitcoin rises, so should its energy consumption.”
However, the network’s electricity usage is rising much more slowly than the price, which has risen by approximately 170 times over the same period.
The Citigroup report, citing numbers from the Cambridge University Center for Alternative Finance, stated that the global power demand by the Bitcoin network reached an annualized 143 terawatt-hours. This is about 4% higher than Argentina’s total electricity generation in 2019.
The Cambridge Bitcoin Electricity Consumption Index (CBECI) currently estimates Bitcoin’s annual electricity consumption is currently somewhere between that of Sweden and Malaysia at 141.6 TWh per year.
The report suggested that China may crack down on mining due to environmental concerns:
“Mining and use of these ‘coins’ is undoubtedly energy-intensive and could face greater regulatory scrutiny as adoption expands, especially if the U.S. continues to scale its crypto footprint and market-leader China cracks down on Bitcoin mining if it adversely impacts its climate goals,”
Bitcoin’s environmental impact has been fiercely debated with many arguments about it either refuted or at least shown to be much more complicated than opponents suggest. In late March, Coin Metrics co-founder Nic Carter produced a well-researched rebuttal to some of these key claims.
In it, he stated that there is an abundance of energy in the four Chinese provinces that the majority of BTC mining occurs, and much of it is derived from solar, wind, and hydropower. Additionally, the Chinese government actually curtails or sequesters power by removing excess energy from the grid or public consumption, often to maintain price levels.
To maintain profits, miners will generally use the cheapest power available. There is an annual migration to Sichuan province to take advantage of cheap hydroelectric power during the rainy season. Studies suggest that between 39% and 76% of Bitcoin mining uses renewable energy.