Bitcoin’s dirty secrets: With rise in value, surge in energy use has reached alarming levels, says report

Updated : March 23, 2021 08:59 PM IST

Cryptocurrency accounts for 0.4 percent of global energy consumption, states Bank of America report

The network of computers that power Bitcoin use energy equivalent to that of many developed countries

Over the past year, Bitcoin saw a massive surge in its value. However, this doesn’t seem to be good news for the environment. Along with a surge in value, the amount of energy used by the network of computers to power the cryptocurrency has also gone up.

According to a report by Bank of America, the network of computers that power Bitcoin uses energy equivalent to that of many developed countries. The report further states that the energy used by the network of computers rivals emissions from major fossil-fuel users and producers such as American Airlines Group and ConocoPhillips.

A report in Bloomberg states that the emissions have grown by more than 40 million tonnes in the past two years. It adds that when the cryptocurrency trades nearly $50,000, it uses about 0.4 percent of global energy consumption. For much of 2021, the value of Bitcoin has been higher than $50,000.

The report titled ‘Bitcoin’s dirty little secrets’ states that even more worrying is the fact that the cryptocurrency’s rising value may mean that its energy consumption would soon rival that of some of the largest countries in the world.

During the pandemic last year, the value of the cryptocurrency skyrocketed, surging to an all-time high of $61,000 in mid-March. This rise meant greater energy use as well. As the cryptocurrency’s supply is limited, rising prices encourage more mining activity, which increases CO2 emissions.

However, this requires huge amounts of energy. A Bloomberg report in 2018 had stated that nearly 75 percent of the world’s Bitcoin mining capacity was in China.

However, cryptocurrency enthusiasts believe that the energy used to mine Bitcoin is nothing compared with that of cars, power plants, and factories, states the Bloomberg report. The report quoted Jaime Leverton, the chief executive officer at Hut 8 Mining, a company focused on mining Bitcoin, as saying that Bitcoin miners use whatever power is available and the focus is absolutely on the lowest-cost power possible.

Published : March 23, 2021 06:35 PM IST

Bitcoin’s dirty secrets: With rise in value, surge in energy use has reached alarming levels, says report

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