A June paper in the journal Joule estimated that annual carbon dioxide emissions from the bitcoin network are as high as 22.9 million metric tons (as much as the country of Jordan). It also accounts for 0.2 percent of global electricity use.
But another recent study by CoinShares, a cryptocurrency asset management and analysis firm, found that the majority of the electricity used by bitcoin actually comes from clean sources, like wind, solar, and hydropower. CoinShares says bitcoin network gets 74.1 percent of its electricity from renewables, making it “more renewables-driven than almost every other large-scale industry in the world.”
It’s a surprising finding, and some analysts are skeptical, since it contradicts other assessments of where bitcoin miners get their energy. Analysts also warn that the same factors that pushed miners to use clean energy could one day lead them to back to dirty fuels.
The CoinShares study also points to a broader problem for how renewable energy is currently deployed around the world: Many renewable power generators are so poorly located and underused that mining bitcoin has become the only viable use for that electricity. Even so, in a warming world with increasing greenhouse gas emissions, is it really worthwhile to use zero-emissions power for a volatile cryptocurrency, which one critic has described as “a colossal pump-and-dump scheme”?
So it’s worth examining why bitcoin uses so much energy to begin with and whether CoinShares’ claim that it has turned toward clean energy stands up to scrutiny.
Why bitcoin needs so much power
Even though bitcoin solely exists in digital zeroes and ones, the computers that run the network are huge energy hogs.
According to the bitcoin energy consumption tracker at Digiconomist, bitcoin currently consumes 66.7 terawatt-hours per year….