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Bitcoin Uses More Electricity Than Many Countries. How Is That Possible?

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Bitcoin electrical connections.

The U.K.'s University of Cambridge's earlier this year estimated Bitcoin's annual electricity consumption is more than The Netherlands, United Arab Emirates, and Argentina.

The process of creating Bitcoin consumes about 91 terawatt-hours of electricity annually.

Most of that consumption occurs in maintaining the vast Bitcoin public ledger.

Bitcoin mining requires highly specialized machines, a large space, and sufficient cooling power, meaning it generally occurs in giant datacenters and often where there is an abundance of cheap energy.

Currently, just seven mining groups own almost 80% of all computing power on the network.

Because miners largely are anonymous, it is difficult to determine how much of the mining is powered by renewables, with global estimates ranging from about 40% to nearly 75%.

An alternate bookkeeping system in which transactions are won by proving ownership of enough coins, not by computational labor, would be more efficient, but significant investments in mining mean Bitcoin stakeholders lack an incentive to change.

From The New York Times
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