It is based on data from the Digiconomist server, which created its own Bitcoin Energy Consumption Index. According to this, Bitcoin’s power consumption has been above 75 TWh since the end of the year. The index currently even counts on 77.8 TWh per year. This represents, among other things, the annual energy consumption of the entire state of Chile.
Consumption alone is not the only thing that lies in the stomach of many opponents of Bitcoin. Also its carbon footprint is very important. It is comparable to the one caused by the whole New Zealand. It is estimated at approximately 37 megatons of CO2 per year.
Last time we saw a similar energy consumption of Bitcoin networks was in May 2020. The current high energy consumption brings further arguments to opponents of cryptocurrencies.
The biggest catalyst for the growth of energy consumption is, of course, the rising price of bitcoin. Also the enormous interest in mining associated with it. Almost every week we can read about the lack of mining equipment, graphics cards, or the massive pre-orders of these machines by large mining companies.
An unsolvable problem of Bitcoin Network
Cardano CEO Charles Hoskinson also said that the problem was that the Bitcoin architecture itself did not mean that the situation should improve. However, as Cardano specifically uses the Proof of Stake consensus mechanism, it is no wonder that it does not highlight conventional mining. According to him, Cardano consumes significantly less, namely some 6 GWh per year.
“The more successful Bitcoin becomes, the higher its price will be; the higher the price for bitcoin, the more competition there will be; and the associated consumption of energy used for mining”.
Is it worth it?
Of course, both proof of stake and proof of work have their unique advantages. Therefore, the prevailing view in the Bitcoin community is that what Bitcoin network can do is worth consuming energy that indirectly increases its security. One of the members of the CoinShares executive, Meltem Demirors, agrees with this:
“What is happening now is that people are trying to decide what is good and what is bad use of energy. But, unlike other industries, Bitcoin is incredibly transparent in how energy is used there”.