The amount of electricity consumed by the Bitcoin network since the beginning of this year has already exceeded the same indicator for the entire 2020.
This means that despite all the corrections in the cryptocurrency market and the negative attitude of the Chinese government to the mining of cryptocurrency, the activity of its miners continues to grow steadily. Let’s talk about the situation in more detail.
Recall that the power consumption of a cryptocurrency network is calculated in terawatt-hours – a measure of energy that is equal to a trillion watts per hour. Usually, electricity consumption of entire countries is determined on this scale, but the Bitcoin network has already reached this scale thanks to the sharp rise in the popularity of cryptocurrency in recent years.
At the same time, throughout 2021, the network faced serious problems.
The fact is that in the spring a campaign against the production of the first cryptocurrency was launched by the Chinese government, which simply banned the mining of BTC in some provinces. This affected the reputation of the cryptocurrency and became the reason for the market crash that took place on May 19.
Major Bitcoin crashes in recent years
Due to the sharp drop in the Bitcoin exchange rate, its mining has become unprofitable for many ASIC owners. As a result, a massive collapse in the difficulty of mining BTC took place, which characterizes how difficult it is to find a new block in the Bitcoin network. The situation is visible in this table.
The stage of falling difficulty of Bitcoin mining
At the same time, the latest recalculations led to an increase in the complexity indicator. This means that the interest of miners in cryptocurrency is growing, while they themselves continue to connect equipment.
What’s happening with Bitcoin mining
The coin’s energy consumption study was conducted by Bloomberg and published in Decrypt. Here is a quote from this publication where experts share their observations.
The power consumption of the Bitcoin network in 2020 reached 67 terawatt hours, but this record has already been broken in 2021. By the end of the year, the BTC network can use up to 91 terawatt-hours, which is comparable to Pakistan’s energy consumption over the same period.
Accordingly, the cryptocurrency blockchain continues to consume amounts of energy that are comparable to entire states. And not the smallest.
Energy consumption growth dynamics of the BTC network
Note that the «too much gluttony» of the Bitcoin network is often used by critics as an argument against cryptocurrency. The reasoning is simple – Bitcoin needs too much electricity, and most of it is produced from sources that are harmful to the environment. We disagree with this point of view, since in fact, high electricity costs are a reflection of the reliability of the cryptocurrency network and the coins themselves in it.
However, the more miners are active in the network, the more difficult it is to inflict any damage on it.
Daily energy consumption of the BTC network
Determining the exact amount of electricity consumed by Bitcoin is quite difficult, since the number of included devices for mining cryptocurrency is constantly changing depending on the economic component of the whole process. For example, before the Chinese government raided local miners, the estimated network consumption hovered around 141 terawatt-hours, but later this figure almost halved.
Countries with the most miners
Another indicator that is worth considering is Bitcoin’s carbon footprint, that is, the amount of harmful substances emitted into the atmosphere by electricity sources. According to the University of Cambridge, only 39 percent of the resources for the BTC network come from renewable green sources. Considering this, about 58 terawatt-hours of electricity lead to negative consequences for the environment.
Bitcoin in the ranking of energy consumption countries
A few months ago, Bitcoin supporters created the American Miners Community, one of whose main goals was to transform the environmental norms of the crypto industry. Earlier, members of the organization stated that more than half of all electricity provided by the BTC network comes from renewable sources.
However, this information is very doubtful, because the studies of the aforementioned University of Cambridge show different data. In addition, the trend for green energy in Bitcoin mining began quite recently. This means that miners simply did not have time for such radical improvements in the operation of their equipment.
We believe that this situation is a direct reflection of the bull run that is happening now – that is, the growth of the cryptocurrency market. Even despite the periodic collapses in the rate, Bitcoin remains profitable for mining and, in general, a coveted reward for miners. Therefore, there is nothing wrong with being ahead of the 2020 indicator. In addition, if BTC continues to rise until the end of the year, new energy consumption records can be expected.