Bitcoin mining has long been singled out for its contribution to rising global carbon emissions. Fortunately for the pioneering cryptocurrency, many of these critiques are based on faulty assumptions and predictions divorced from an understanding of the built-in energy-seeking incentives native to Bitcoin, and underplaying the positive impact it has now and may have in the future for billions of global citizens. While it is true that the global Bitcoin network does consume a meaningful amount of energy, that consumption must be put into context and weighed against its benefits if we are to have a consequential debate. We don’t often hear criticism of Netflix or Google’s data and energy consumption costs, so why Bitcoin?
Some estimates suggest that the Bitcoin network consumes roughly 120 terawatt-hours of electricity annually, which is more than some small nations, and 0.55% of all global electricity production. However, despite high energy consumption from mining, the University of Cambridge’s Bitcoin Electricity Consumption Index concludes that “Bitcoin’s environmental footprint currently remains marginal at best.” How can both things be true?