Crypto Mining Projected To Use More Electricity Than Norway

By Andrei Ene

Posted on May 3, 2021

Mining cryptocurrency seems to have taken over our blue Earth. With most users out there trying their hand on mining or at least buying some Bitcoin or Ethereum. Or any other crypto out there tweeted by Elon Musk that blows up overnight. But this also comes with some caveats, from power consumption and environmental concerns to the instability of the digital currency market. On top of all this sensitive exchange, mining bitcoin seems to consume, at this point, more electricity than the entirety of Argentina. This according to a recent energy tracker proposed by the Cambridge University.

The Crypto Conundrum

The fact that cryptocurrency requires no physical form or bank to be used, and anyone with access to a powerful computer can mine one, created some scarcity in key areas of the market. Like graphics cards for example, or complex CPUs. In essence, when you “mine” you are using your PC’s most powerful computer components to verify crypto transactions, a process that then creates currency for the user.

With this in mind, Cambridge Bitcoin Electricity Consumption Index intended, and succeed, to track all the energy drawn from bitcoin mining, globally. To note, even the renowned Uni stated that this is a “best-guess estimate”, taken and compared to other electricity uses to display the tremendous influence of cryptocurrency.

One of the most recent updates regarding this tracker, offered some perspective-altering statistics, as now, Bitcoin consumes 121.36 terawatt-hours worth of electricity every single year. Higher than Argentina’s energy expenditure and almost as “power-hungry” as Norway. Fun fact, when Bitcoin is classed as a country, it ranks 30th in the world, spending about 0.5% of the world’s energy generation.

The Environmental Angle Of Crypto

In the case of Bitcoin, to “mine” the currency, computers – often specialized ones named ASIC – are connected to the cryptocurrency network. To boost earnings, users usually connect large numbers of miners to the network – even entire rooms full. And the loss of electricity is not a factor, because the ASIC or PC’s are more or less constantly working, and bringing a profit. This in turn proves wasteful to the environment, in the short, and long run. In the short run, the current price per kilowatt can’t sustain this level of consumption. And the long run, because this “mining business” is a cycle, and as a cycle, most of the “old parts” end up in a landfill. Not to talk about hardware scarcity and price gouging. And this is only the beginning.

Experts suggest that mining, and energy consumption, will continue to escalate unless the price of Bitcoin filters significantly. Adjacent, hardware companies are pressured to produce more powerful tech each generation, with more GPU horsepower, ending up with a 300W power demand to squeeze maximum performance out of each chip. With mining rigs using vast numbers of graphics cards over long periods, the environmental impact of cryptocurrency will only get worse. It all depends on the user and the market at this point.