‘Omission Of Emission’: Bitcoin Now Consumes More Energy Than Argentina; Power Usage Surges 80% In Past 15 Months

Continuing with its meteoric surge, cryptocurrency Bitcoin on bygone Saturday (13 March) surpassed $60,000 levels for the first time, touching an all-time high of $60,012.

Just in March last year, Bitcoin was trading at around $5,000. However, over the year, the backing by corporate heavyweights, including online payments giant PayPal and Elon Musk-led electric carmaker Tesla, led to a significant surge in the value of the cryptocurrency.

The soaring value, however, is also accompanied with a striking surge in its power consumption. As per a Business Insider report, Bitcoin's energy consumption has jumped 80 per cent since the beginning of 2020.

The report quotes data from the Cambridge's Centre for Alternative Finance, which states that the cryptocurrency's estimated annualised electricity consumption at the beginning of 2020 was 71.07 terawatt-hours, which hit a record high of 128 terawatt-hours on 11 March this year.

This figure stands taller than the Argentina's 125.03 terawatt-hours per year, according to U.S. Energy Information Administration country data. The data further reveals that if we rank every country in terms of their total energy consumption including bitcoin, the cryptocurrency would bag the 29th spot.

The virtual currency now represents 0.58 per cent of the world's total annual electricity consumption. What is even more concerning is that the rising price offers even more incentive to Bitcoin miners to run more and more machines.

Notably, the process of “minting” Bitcoins – known as mining – involves computers time-stamping transactions into an ongoing chain to prevent duplication of coins. These heavy-weight computers are continuously performing transactions and competing against each other to get the change to create the next block of transactions that will award them new bitcoins.

However, the computers that aren’t awarded these Bitcoins continue to operate, thus causing power to be consumed in vain.

Earlier, Bill Gates had also criticised Bitcoin for its environmental impact. In an interview with NYT reporters, he reportedly said, "Bitcoin uses more electricity per transaction than any other method known to mankind...It's not a great climate thing.”

Some experts have even called for ‘carbon tax’ of some kind on bitcoins to balance out its negative environment fallouts, while others opine that as long as Bitcoin mining uses renewable energy, it is not a problem.

A note on the Cambridge Centre for Alternative Finance website says, "Even when assuming that bitcoin mining was exclusively powered by coal – a very unrealistic scenario given that a non-trivial number of facilities run exclusively on renewables – total carbon dioxide emissions would not exceed 58 million tons of CO2, which would roughly correspond to 0.17 percent of the world's total emissions."

However, the statement adds, "This is not to say that environmental concerns regarding Bitcoin's electricity consumption should be disregarded. There are valid concerns that Bitcoin's growing electricity consumption may pose a threat to achieving the United Nations Sustainable Development Goals in the future."