Global energy consumption from Bitcoin mining doubled in 2023, equating to the annual energy use of countries like Australia and more than Egypt’s population of 110 million.
Bitcoin mining’s process, “proof of work,” demands high-power computing, leading to a substantial carbon footprint and stressing local grids in the U.S.
Efforts to regulate the industry face obstacles due to the crypto sector’s inherent resistance to governance, highlighting the need for stringent and enforceable measures to address its environmental impact.
The energy footprint of Bitcoin mining is off the charts. The already gargantuan energy consumption of the process to mint new coins of the cryptocurrency more-than doubled over the course of 2023 on the back of strong prices. The United States, one of the world’s biggest hubs for cryptocurrency mining, is at the eye of an intensifying storm about reigning in the problematic energy consumption and associated emissions of the cryptocurrency, but regulating it won’t be easy.
By the end of last year, global energy consumption from bitcoin mining has grown 101% since Jan. 1, reaching a whopping 141.2 TWh, according to data from Digiconomist. All that amounts to a carbon footprint of 78.7 million metric tons of CO2 per year. To put that in perspective, Bitcoin mining now consumes as much energy in a year as Australia and more than Egypt, which boasts a population of 110 million people, and emits more carbon dioxide than Oman.
Bitcoin’s outsized energy and carbon footprints come as a result of the cryptocurrency’s unique mining process. Bitcoin relies on a public ledger powered by the blockchain to keep transactions anonymous, secure, and authenticatable. To achieve this, each new entry to the ledger requires complex computational problem-solving known as “proof of work” which relies on trial and error – plugging in random solutions and seeing if it fits. The “miner” who solves each unique puzzle the fastest receives a newly minted Bitcoin. This means that miners using high-power super-computers capable of doing such work faster have a key advantage. This is where the massive amount of energy use factors in.
As Bitcoin prices inflate, more and more miners are competing to solve these puzzles in real time. But if more miners led to the creation of more and more bitcoins more often, the market would flood and currency prices would tumble. To prevent this, solving for proof of work gets harder and harder with each puzzle, to the effect that mining one Bitcoin should always take 10 minutes.
The result is the same amount of Bitcoin produced as always, but with a forever increasing energy footprint. In 2009, you could mine Bitcoin using just a few seconds’ worth of household electricity, whereas in recent years, you would have to use about 9 years’ worth. As a result, many miners have entire warehouses of supercomputers working away 24 hours a day, 7 days a week.
And certain countries and regions of the world are bearing the burden of that energy consumption more than others. China used to be a powerhouse for Bitcoin mining operations, but Beijing banned Bitcoin and other cryptocurrencies in 2021. As a result, many Bitcoin miners have moved their operations to the United States, following abundant energy resources and relatively lax legal restrictions.
In just a few years, the United States’ share of global crypto mining has ballooned from from 3.5 percent to 38 percent, making the U.S. the single biggest crypto mining market. In the process, the Bitcoin boom has “stressed local grids, raised electricity bills for nearby residents, and kept once-defunct fossil fuel plants running,” according to recent reporting from Grist. But exact figures about who is mining and where, and exactly how much energy each operation is using, are extremely difficult to establish.
Now, the United States is trying to get a handle on the situation. Step one: attempt to understand how much energy Bitcoin miners are consuming on U.S. soil. Last week, the U.S. Energy Information Administration announced that it would start collecting energy use data from more than 130 “identified commercial cryptocurrency miners” operating in the US.
“As cryptocurrency mining has increased in the United States, concerns have grown about the energy-intensive nature of the business and its effects on the US electric power industry,” the EIA said in a new report which provides the foundation for the survey, which began this week. “Concerns expressed to EIA include strains to the electricity grid during periods of peak demand, the potential for higher electricity prices, as well as effects on energy-related carbon dioxide emissions.”
But beyond doing an accounting of the energy footprints of commercial-scale mining operations in the United States, making actual change to those figures will be an uphill battle. Past efforts to regulate the industry have been laughable, stemming mostly from recommendations and pleas for miners to source their energy from more clean and sustainable sources. Such guidance is almost guaranteed to land on deaf ears, as much of the crypto world’s appeal is a complete lack of governance and oversight. “If anything represents free-market capitalism in its most naked form, it is Bitcoin,” the BBC remarked in 2021, making efforts to promote voluntary sustainability standards “a touch bizarre.”
Going forward, measures to reign in Bitcoin will have to be far more stringent. And more than that, they will have to be enforceable. Getting actual figures through the EIA’s current survey is a critical first step, but it’s unclear how the government will effectively follow it up with meaningful policy measures.
By Haley Zaremba for Oilprice.com
More Top Reads From Oilprice.com:
Kenya’s Ambitious Renewable Energy RevolutionFusion Breakthrough Could Spark AI and Quantum Computing BoomNew Study Questions LNG as a “Bridge Fuel” in Decarbonization
>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : OilPrice – https://oilprice.com/The-Environment/Global-Warming/Bitcoins-Soaring-Energy-Demand-Sparks-Regulatory-Challenges.html
