Bitcoin Has an Energy Consumption Problem - Forex News by FX Leaders
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Bitcoin Has an Energy Consumption Problem

Posted Thursday, September 16, 2021 by
Timothy St. John • 2 min read

Bitcoin is in the news again over energy consumption concerns after an article published by the New York Times pointed out that it uses more energy than a number of small countries. Mining Bitcoin is big business, but it is also using a ton of energy.

BTC/USD

Even after going under the spotlight for energy consumption and its negative environmental impact, Bitcoin still has an energy problem. Its current energy consumption is seven times as much as what all of Google uses.

In May this year, Tesla CEO Elon Musk called Bitcoin’s energy usage insane. He said that because of the environmental impact of Bitcoin mining, his company will suspend sales of electric cars made with Bitcoin. This had a huge impact on Bitcoin’s price, as it dropped below $5,000, getting rid of about $100 billion in Bitcoin currency in just a few hours.

Bitcoin’s energy usage has only gotten worse over the years, currently using 66 times as much energy as it did just six years ago. The huge increase in Bitcoin mining and energy expenditure has brought attention to this cryptocurrency, though Bitcoin is in no danger of falling from its top spot on the crypto market anytime soon.

A Small Reprieve

Bitcoin’s energy usage briefly dropped earlier in the year in light of a Chinese ban. As the Chinese government started to stamp out Bitcoin mining throughout the country region by region, the Bitcoin energy usage algorithm changed how much how much energy is needed to create a single Bitcoin.

Because many Bitcoin miners had to stop creating new Bitcoin for a while in the face of this ban, the amount of Bitcoin mining happening around the world dropped off considerably for a time. That didn’t last for very long, though. Many of the miners fled to other countries that were more favorable to Bitcoin mining and started up operations there. Miners in other parts of the world started to increase their production of Bitcoin mining to compensate as well, and pretty soon, the Bitcoin energy expenditure for mining was back up to its previous high levels.

Put into perspective, Bitcoin mining across the world in 2020 used more energy than all of the country of Pakistan. The numbers aren’t in for this year yet, but it’s likely that they’ll be much higher than that by the time they have been totaled.

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