Can you love Bitcoin and the environment at the same time? The digital currency depends on so-called miners whose high-powered computers run day and night, soaking up electricity to perform the calculations used to verify transactions.
The Cambridge Centre for Alternative Finance keeps a running estimate of annualized use: It jumped from 6.6 terawatt-hours at the start of 2017 to 67 terawatt-hours in October 2020 to 121.9 in early February as prices surged.
Pacific Northwest, Texas and parts of Europe where emissions-free hydro and wind power are so plentiful that homes and businesses have a hard time soaking it all up.
Since at the end of 2020 there were almost 19 million coins out in the world, the system is now reaching the highest levels of difficulty, meaning miners are constantly enlisting more computing power.
Some cryptocurrencies don’t use miners at all but rely on systems like “staking” — rewarding coin owners for holding on to their currency and approving or invalidating transactions.
And while use of renewable sources for electricity is growing, Bitcoin miners will be competing for green power with other sectors looking to decarbonize, including transportation, heating and industrial processes.
Even as prices have been going crazy, it’s hardly made a ripple in power markets, according to analysts at BloombergNEF, although in Iran, government officials pointed to Bitcoin miners as one cause of a rash of blackouts when cold weather strained the country’s power grid.
But if you look at other provinces, where there is a lot of Bitcoin mining activity, in those places, there’s a lot of hydropower that was overbuilt,” Nic Carter, co-founder of researcher Coin Metrics, said of Chinese miners during an interview with Bloomberg Television.
But in May, Tesla Chief Executive Officer Elon Musk announced a stunning about-face, suspending acceptance of the token citing environmental concerns.