Just How Environmentally Unfriendly IS Bitcoin?

Bitcoin Power Consumption

Bitcoin is energy-intensive because it takes super-powerful, high-speed computers, each competing with one another to be first to solve the blockchain “riddle” of confirming transactions, which in turn earns the reward for completing a block.

Bitcoin vs Data Centers

The entire Bitcoin network currently uses up to 100 terawatt-hours (TWh) of electricity annually, while data centers use double that — which is more than Iran. We’re talking not only Microsoft but Apple, Amazon, Google, Facebook, and countless smaller tech services and digital storage providers.

The Backstory

In 2008, when Bitcoin was just a thought in Satoshi Nakamoto’s mind, a study was released at the big data-focused Uptime Symposium in Orlando. It pointed out that energy use from data centers was growing at a rate of 24% per year, and could soon be out of control. This news prompted Greenpeace to start targeting global internet servers and other data centers. And at the time, the industry had already started implementing energy-efficient measures.

The Energy Credit Loophole

With all their well-documented electricity use, how are data centers claiming zero emissions? It’s basically done through strategic (and somewhat deceptive) bookkeeping practices that happen to be completely legal.

Geography Counts Too

In some places, like China, Google data centers have to run on fossil fuels because renewable energy isn’t available. And yeah, China lays claim to over 60% of all Bitcoin mining activity as well, because electricity is famously cheap. And infamously coal-fired.

Bitcoin’s Energy Edge

Since miners have financial incentives to keep their energy costs low, they often find power that would otherwise go to waste. Ever heard of gas-flare recapturing? Well, natural gas mining causes some of the gas to be burnt off or flared into the air, where it’s lost on release. Bitcoin miners capture that flare and use it for power.

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