A few weeks ago, Kosovo became the latest country to ban cryptocurrency mining due to its excessive energy consumption.
Mining and energy consumption: the situation in the world
China, Iceland, Iran and Kazakhstan, there is a long list of countries that have decided to stop or at least limit an activity that, although very profitable, is considered to be highly energy intensive.
According to the Cambridge Bitcoin Electricity Consumption Index, the total electricity used for Bitcoin mining, worldwide, would amount to 135.11 terawatt-hours of electricity, which is more than the annual energy consumption of a country like Finland, for example, or more than a third of the energy used in the entire United States for residential heating.
In the United States, Texas currently seems to be home to the largest concentration of cryptocurrency mining farms, thanks to the abundance of cheap energy.
The debate between supporters and opponents
In general, the debate on the consumption and sustainability of Bitcoin has been raging for years. There are those who have long argued that it is an unsustainable activity from an energy and environmental point of view, and those who think differently. Elon Musk helped spark this debate when he tweeted last May that Tesla would no longer accept payments in Bitcoin. According to the richest man in the world, Bitcoin was not sustainable enough.
Tesla & Bitcoin pic.twitter.com/YSswJmVZhP
— Elon Musk (@elonmusk) May 12, 2021
But after a few months, in July, Musk himself “re-accepted” Bitcoin as a form of payment, claiming that mining was actually becoming greener and that Bitcoin had a future anyway.
Indeed, apart from the great use that is being made of renewable energy to power the very powerful data centres used to make the very complicated calculations needed to solve a block (about 65/70% of the energy used comes from renewable sources). Recent research seems to show that the impact of mining on the environment is negligible.
Whereas DigiEconomist founder Alex de Vries stated a few weeks ago:
“I have never seen anything as inefficient as bitcoin”.
According to the energy expert, mining would consume as much as all the data centres in the world put together.
On the other hand, research by ARK Investment Management found that Bitcoin activity would consume less than about 10% of the energy required by the traditional banking system alone.
A few days ago Russian leader Vladimir Putin also entered the debate, describing mining as a very beneficial activity for a country that has plenty of energy and computer experts.