Cryptocurrency’s Dirty Secret: Energy Consumption
Though skeptics may characterize cryptocurrency as “fake money,” “worse than tulip bulbs,” or outright fraud, it is a very real business. The market capitalization of the almost 19,000 cryptocurrencies in circulation is currently around $1.75 trillion — about the same as the gross domestic product of Italy, the world’s eighth largest economy. Even though you might not be able to buy a loaf of bread with Bitcoin at the corner store, many investors are putting a lot of legal tender money into cryptocurrencies.
But crypto has a dirty little secret that is very relevant to the real world: it uses a lot of energy. How much energy? Bitcoin, the world’s largest cryptocurrency, currently consumes an estimated 150 terawatt-hours of electricity annually — more than the entire country of Argentina, population 45 million. Producing that energy emits some 65 megatons of carbon dioxide into the atmosphere annually — comparable to the emissions of Greece — making crypto a significant contributor to global air pollution and climate change.
And crypto’s thirst for energy is growing as mining companies race to build larger facilities to cash in on the 21st century gold rush.
“Bitcoin mining operations are in an arms race between time, the volume of miners, and the efficiency of the machines they use,” said Joshua D. Rhodes of the Center on Global Energy Policy. “When it comes to Bitcoin’s energy use, it’s currently something of a ‘wildcatter’ market. The Texas grid operator ERCOT estimates that crypto miners may increase energy demand by up to 6 gigawatts by mid-2023, roughly the equivalent of adding another Houston to the grid.”
