The bitcoin network is burning more and more energy for mining bitcoins. The total power consumed by the bitcoin network has already crossed the 2020 consumption level. Last year, the electricity consumed by the network for mining bitcoins was estimated to be around 67 terawatt-hours (TWh). The consumption this year has already surpassed that mark and by the end of 2021, the mining looks set to have consumed 91TWh of energy — as much as Pakistan, according to a research report by Bloomberg. It noted that as the bitcoin price goes up, more bitcoin miners join the network with less energy-efficient machines to mine bitcoin that pushes the use of energy.
The high use of electricity for mining bitcoin has also made it increasingly important to switch to low-carbon energy sources for electricity. According to the Cambridge Bitcoin Electricity Consumption Index by the University of Cambridge, bitcoin’s power consumption is closely linked to the financial costs incurred in mining as well as bitcoin’s expected price trajectory. In its FAQs on power consumption, it said that rising bitcoin prices and/or decreasing electricity costs generally lead to increased electricity consumption as less efficient hardware will be reinstated.
Earlier this year, Tesla’s Elon Musk had said that his company would stop accepting Bitcoin from customers for its electric cars amid concerns over the environmental impact of the virtual currency. However, in July at the Bitcoin-focused conference B Word, Musk said Tesla would resume accepting bitcoin once he “confirm that the percentage of renewable energy usage is most likely at or above 50 per cent, and that there is a trend towards increasing that number,” Reuters had reported quoting Musk.
In terms of countries that mine the most bitcoin, China had a share of 46 per cent monthly average share of global bitcoin mining hashrate as of April 2021 followed by 16.8 per cent of the US, 8.2 per cent of Kazakhstan, 6.8 per cent of Russia, 4.6 per cent of Iran, 3.4 per cent of Malaysia, 3 per cent of Canada, 2.81 per cent of Germany, 2.27 per cent of Ireland, and 5.92 per cent of others, according to the Cambridge Bitcoin Electricity Consumption Index.