Over the past decade, cryptocurrencies have revolutionized the global financial landscape, offering a decentralized alternative to traditional money. However, behind their rise and popularity, especially in the case of Bitcoin, lies a significant challenge: their enormous energy consumption. According to recent estimates, The Bitcoin network consumes more electricity per year than many entire countries, which has sparked intense debate about its sustainability and environmental impact in a world desperately seeking to reduce carbon emissions.
Bitcoin, the most well-known and valuable cryptocurrency, operates under a mechanism called “proof of work” (PoW). This system requires “miners” to solve complex mathematical problems to validate transactions and add them to the blockchain. In exchange, they receive a reward in the form of bitcoins. However, this process requires a colossal amount of computing power and, therefore, electricity. According to the Bitcoin Electricity Consumption Index from the University of Cambridge, the network consumes approximately 120 terawatt-hours (TWh) annually. To put this into perspective, this figure exceeds the electricity consumption of countries such as Argentina (around 130 TWh) or Norway (124 TWh). If Bitcoin were a country, it would be among the 30 nations with the highest energy demand on the planet.
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But Bitcoin is not the only culprit. Before its transition to proof-of-stake (PoS) in 2022, Ethereum, the second-largest cryptocurrency, also relied on mining and consumed about 80 TWh per year. Although its upgrade drastically reduced its energy footprint to less than 0.003 TWh annually, Bitcoin’s case remains emblematic. Other PoW-based cryptocurrencies, although less relevant, also contribute to this mass consumption trend. This phenomenon has led to striking comparisons: a single Bitcoin transaction can consume as much energy as 453,000 Visa card transactions, according to Digiconomist.
Why is this consumption so high? The answer lies in competition. As the value of Bitcoin increases and more miners join the network, the difficulty of mathematical problems grows, requiring more powerful equipment and more energy. Mining “farms,” with thousands of computers running 24/7, have become a common sight in countries with cheap electricity, such as China (before its ban in 2021), Kazakhstan, or Iran. However, this model comes at an environmental cost. Around 60% of the energy used in Bitcoin mining comes from fossil sources, such as coal, generating millions of tons of CO₂ per year. Some studies estimate that its emissions are around 36 million tons per year, comparable to those of New Zealand.
In the face of criticism, Bitcoin advocates argue that its consumption needs to be put into context. Compared to industries such as gold mining (132 TWh annually) or the traditional banking system, which also relies on data centers and offices, Bitcoin’s impact does not seem so disproportionate. They also point out that miners are migrating to renewable sources, such as hydroelectric power in Sichuan or geothermal power in Iceland, to lower costs and reduce their carbon footprint. However, these initiatives still do not offset the global dependence on fossil fuels.
BUY BITCOINThe future of cryptocurrencies poses a dilemma. While technologies like Ethereum demonstrate that it is possible to operate energy-efficiently, Bitcoin clings to a model that, while ensuring security and decentralization, is becoming increasingly unsustainable. The question is whether this “digital gold rush” will be able to adapt to the demands of a planet in climate crisis or whether it will remain an energy luxury that few can justify. For now, the contrast between its economic value and its environmental cost continues to fuel a debate as complex as the algorithms that underpin it.
