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How much Energy Does Bitcoin Use?

The energy consumption of any industry is a hot topic, especially in today’s world where limiting the use of non-renewable energy sources, and reducing carbon emissions are priorities. But determining the threshold of energy usage is a complex question that’s intertwined with debates around our priorities as a society. It comes down to values and what we consider to be “worth” spending resources on. In this article, we will delve into the world of cryptocurrency energy, and explore the reasons why Bitcoin uses energy, the impact it has, and the key misconceptions surrounding it.

bitcoin mining factory
bitcoin mining factory

What is Cryptocurrency Energy?

Cryptocurrency energy refers to the amount of energy required to power the computer systems that secure, verify, and process cryptocurrency transactions. This energy is used to perform complex mathematical calculations necessary for validating and adding transactions to the blockchain.

An example of cryptocurrency energy consumption can be seen with Bitcoin. Bitcoin mining, which involves solving complex mathematical problems to validate transactions, requires large amounts of energy to power the computers doing the calculations. The computers used for Bitcoin mining are specially designed to perform complex mathematical calculations. The amount of energy being used for Bitcoin mining is between 120 and 240 billion kilowatt-hours per year. The energy is needed to power the computers that perform the complex mathematical calculations required to validate transactions on the Bitcoin network. The intense computational demand of Bitcoin mining requires a significant amount of energy to keep the computers running 24/7. This has led to criticism for the high carbon footprint associated with energy consumption and the potential negative impact it may have on the environment.

Energy Use in Cryptocurrency: A Controversial Topic

The energy consumed by Bitcoin mining is used to power the computers performing complex mathematical calculations for transaction validation. The computers need to be running continuously due to the high energy demand of these calculations. The type of energy used for Bitcoin mining is primarily electricity, with the majority of it coming from non-renewable sources like coal and natural gas. The infrastructure supporting this energy consumption includes power plants and electrical grids that distribute electricity to mining operations. Although some mining operations have implemented renewable energy sources like solar panels, the majority of the energy used for mining still comes from non-renewable sources.

Thus, in the case of Bitcoin, the energy consumption question is a fair one. The Cambridge Center for Alternative Finance (CCAF) estimates that Bitcoin currently consumes around 110 Terawatt Hours per year, which is 0.55% of global electricity production, roughly equivalent to the energy consumption of countries like Malaysia or Sweden.

Why does Bitcoin use Energy?

bitcoin validating transactions

The complex mathematical computations required in the proof-of-work consensus mechanism are critical for securing the Bitcoin blockchain. Miners must perform these computations to validate transactions, add new blocks to the chain, and earn newly minted bitcoins as a reward. These computations, known as “mining,” consume a significant amount of energy and computational power.

To perform these computations, miners use specialized hardware such as ASICs (Application-Specific Integrated Circuits), designed specifically for Bitcoin mining. These ASICs consume a lot of energy because they need to run continuously to solve complex computations in real time, which requires significant computational power.

For miners who are willing to invest in the energy required for mining, the reward can be substantial. The reward for successfully mining a block includes newly minted bitcoins and transaction fees, which can provide a significant return on investment. However, the high energy consumption and the cost of specialized hardware have led to criticism of Bitcoin mining’s carbon footprint and its impact on the environment.

The growth of the Bitcoin network has led to an increase in energy consumption for mining operations, which has become a major concern due to its contribution to greenhouse gas emissions and other environmental problems. Some of the environmental problems associated with Bitcoin mining include carbon emissions, water scarcity, and waste heat. The energy-intensive process of Bitcoin mining generates waste heat, which can lead to temperature increases and other environmental problems in the surrounding areas.  Despite these concerns, the proof-of-work consensus mechanism remains a critical aspect of the network’s security, as it makes it challenging for any single actor to manipulate the blockchain.

The energy consumption of Bitcoin mining can be measured by its hash rate, which is a metric that represents the computational power of the network. As the network grows, and more miners join, the hash rate increases, resulting in a corresponding increase in energy consumption. For example, in 2021, the hash rate of the Bitcoin network was over 150 exahashes per second, compared to less than 1 exahash per second in 2013. The increase in the hash rate of the Bitcoin network, during this period, is approximately 14900%.

The Impact of Bitcoin's Energy Use

impact of bitcoin energy

The impact of Bitcoin’s energy consumption has sparked intense debate and discussions among various stakeholders. The energy-intensive process of mining bitcoins can lead to increased demand for non-renewable energy sources, such as coal and natural gas, which in turn contributes to the emissions of greenhouse gasses and exacerbates the effects of global warming. This can have long-lasting and damaging impacts on the environment and public health.

However, some argue that Bitcoin’s energy consumption can also have a positive impact. For instance, in regions with abundant sources of renewable energy, such as hydro, wind, or solar power, Bitcoin mining can act as a stimulus for the development, and growth of the renewable energy industry. This can increase investment in renewable energy technologies, and help to integrate otherwise unused energy into the grid. Furthermore, Bitcoin mining can also increase the demand for energy efficiency and energy storage solutions, helping to drive technological innovation and advancements in these areas.

The impact of Bitcoin’s energy consumption is complex and multi-faceted, with both positive and negative aspects to consider. On the one hand, it provides security and decentralization to the Bitcoin network, making it difficult for any one actor to manipulate the network. However, on the other hand, the energy consumption required for Bitcoin mining contributes to environmental problems like greenhouse gas emissions. The high energy consumption also raises questions about its sustainability and the long-term viability of the network. In order to fully understand the implications of Bitcoin’s energy consumption, careful consideration and analysis are necessary.

The Value of Bitcoin and Energy Consumption

Currently, there are over 190 million Bitcoin users worldwide and over 18.6 million Bitcoins have been generated through the proof-of-of-work consensus mechanism. This mechanism requires miners to perform complex mathematical computations, and approximately 900 new bitcoins are generated every day.

The profitability of Bitcoin mining is dependent on the price of Bitcoin, and the cost of energy, as miners, must cover their expenses for hardware, electricity, and other costs associated with running the operation. If the price of Bitcoin is high, and energy costs are low, then mining can be very profitable. However, if energy costs are high, and the price of Bitcoin is low, mining may not be profitable, leading to a decrease in mining activity and a reduction in energy consumption. Ultimately, the decision to mine Bitcoin and the associated energy consumption is based on an individual’s assessment of the cryptocurrency’s value, its potential for growth, and the energy costs associated with mining.

In order to give an example of profit, let’s say a miner wants to mine Bitcoin and has a total cost of $125,000 for hardware, electricity, and other expenses, per month. If the price of Bitcoin is $22,745.12 and the reward is 6.25, then the miner will earn 6.25 Bitcoin, assuming he mines one block a month, which is worth $145,940.

In this scenario, the miner will have a profit of $20,940 ($145,940 – $125,000). Thus, mining is profitable, and the miner will likely continue to mine Bitcoin, consuming energy in the process. However, if the price of Bitcoin decreases to $20,000 and the energy costs increase, resulting in the monthly expense rising to $130,000, then the miner will lose $5,000, and the miner may stop mining, leading to a reduction in energy consumption.

Energy Consumption vs. Carbon Emissions


When it comes to understanding Bitcoin’s energy consumption, there are a few misconceptions worth addressing. Firstly, there’s a difference between energy consumption and carbon emissions. While energy consumption is relatively easy to estimate, carbon emissions are much harder to determine because miners need to know the energy mix (the makeup of different energy sources used by the computers mining Bitcoin) to extrapolate the carbon emissions.

For example, one unit of hydro energy will have a much lower environmental impact than the same unit of coal-powered energy. While the CCAF has worked with major mining pools to put together an anonymized dataset of miner locations, we are still largely in the dark about Bitcoin’s actual energy mix. As a result, estimates for the percentage of Bitcoin mining using renewable energy vary widely.

Another factor that sets Bitcoin’s energy consumption apart from other industries is that Bitcoin can be mined anywhere. Most of the energy used globally must be produced relatively close to its end users, but Bitcoin has no such restrictions, enabling miners to use power sources that are inaccessible to most other applications. For example, Sichuan and Yunnan experience a surplus of renewable hydro energy during the wet season. This excess energy can be put to use by Bitcoin miners, allowing them to harness unused energy and effectively reduce waste. Additionally, the low cost of energy in these regions can make mining operations more profitable for those who invest in them. By utilizing the surplus energy, Bitcoin mining operations in Sichuan and Yunnan may help to alleviate the strain on local energy grids, while also reducing the carbon footprint of the Bitcoin network as a whole. However, it is important to note that the use of surplus energy in Sichuan and Yunnan is only one possible solution to the energy consumption concerns surrounding Bitcoin, and there are other factors that must be considered, such as energy costs and the environmental impact of Bitcoin mining operations.

Bitcoin's Unique Energy Use

In addition to being able to mine anywhere, Bitcoin also has the ability to utilize energy that would otherwise go unused because miners can set up their operations in areas with surplus renewable energy, such as hydropower. In these regions, there may be excess energy production capacity and limited ability to store and transport energy to other areas, making it more economical for miners to use this energy for Bitcoin mining.

As a result, Bitcoin mining can serve as an incentive for the production and investment in renewable energy sources. Since the mining process provides a use case for otherwise unused energy, it can lead to increased investment in renewable energy projects in these regions. Thus, Bitcoin mining can have a positive impact on the environment by promoting the use of clean, renewable energy.

The Energy Footprint of Bitcoin: Mining vs Transactions

Bitcoin, the world’s largest cryptocurrency, has a large energy footprint due to the computing power required for the mining process. To validate transactions and add them to the blockchain, miners must solve complex mathematical problems using specialized hardware. This process, known as mining, consumes vast amounts of energy, making it the main contributor to Bitcoin’s energy consumption.

In addition to the energy needed to power the mining hardware, cooling systems are also necessary to keep the equipment from overheating. These cooling systems also consume a significant amount of energy, further contributing to the overall energy footprint of Bitcoin mining.

While mining requires a lot of energy, using Bitcoin as a form of currency and a means of transferring value does not consume a significant amount of energy because the process of making transactions is much less resource-intensive compared to mining.

Top Bitcoin mining setups

Here is a list of top Bitcoin mining setups, along with their estimated energy consumption and other metrics:

Mining Setup Estimated Energy Consumption (TWh) Hash Rate (TH/s) Country
Antminer S19 0.23 95 China
Bitmain S17+ 0.17 73 China
MicroBT M21S 0.16 68 China

It is important to note that the exact energy consumption of these mining setups can vary based on factors such as the cost of energy in the region, and the efficiency of the cooling systems used.

Reducing Energy Consumption in Bitcoin: Potential Solutions & Collaboration Efforts

There are several potential solutions to reduce the energy consumption of Bitcoin. One solution is to transition to more energy-efficient mining equipment. Another solution is to use renewable energy sources, such as solar and wind power, to power mining operations. A third solution is to implement consensus mechanisms that are less energy-intensive than Proof of Work (PoW), such as Proof of Stake (PoS). However, implementing these solutions requires the efforts of multiple stakeholders, including industry players, government regulations, and community efforts.

Overall, reducing the energy consumption of Bitcoin will require a multi-faceted approach that involves collaboration and cooperation from all parties involved. By working together, it is possible to create a more sustainable and energy-efficient cryptocurrency ecosystem.


In conclusion, the energy consumption of Bitcoin is a double-edged sword. On one hand, the high energy consumption associated with mining is a major environmental concern, as it contributes to the global demand for energy and often relies on non-renewable sources of energy. On the other hand, the energy consumption of Bitcoin can drive investment in renewable energy sources, such as solar and wind power, as the need for energy to support the mining process increases.

Nakul Shah
Nakul Shah - DLT Expert and Project Manager
53 Articles

Nakul Shah is a technology enthusiast, blockchain/AI consultant, author, and writer, passionate about innovative solutions. He is a regular speaker at conferences across the globe on blockchain, DLT, and fintech. Nakul specializes in writing content for fintech, gaming, emerging technology, and eCommerce sectors, and offer consultancy, training, and editorial services to clients across the globe. He is also a contributor to various publications, and has authored over 1000 articles, 100+ case studies, 75+ white papers, and a book on Blockchain titled “Blockchain for Business with Hyperledger Fabric.”

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Reviewed and Fact Checked by Eugene Abungana , Investment Analyst, Financial Analyst, and Institutional Trader