A new tool from University of Cambridge’s Centre for Alternative Finance, called the Cambridge Bitcoin Electricity Consumption Index (CBECI) has revealed that Bitcoin is using up approximately 0.28 percent of the world’s total electricity supply.
The CBECI found that Bitcoin uses an estimated 61.76 terawatt-hours (TWh) of electricity per year, which is more than what some countries even consume.
Further into the study, the CBECI found that if Bitcoin was a country, it would be the 41st most-energy-demanding nation on earth.
This is because, the Czech Republic, for example, consumes an estimated 62.34 TWh while Switzerland consumes 58.46 TWh annually by comparison.
How it works
Computers known as mining machines are involved in the mining process of Bitcoin. These machines are connected to the currency network to verify transactions, which involves puzzle-solving.
To make as much money from this process as possible, people often connect large numbers of miners to the network – even entire warehouses full of them.
That uses lots of electricity because the miners are more or less constantly working.
Some Bitcoin miners have even relocated to places like Iceland to reduce costs as geothermal energy is abundant there while cold Arctic air helps with cooling.
Additionally, Bitcoin has been criticized for price volatility, use in illegal transactions and thefts from exchanges.
One study even estimated that the electricity used in Bitcoin production produces about 22 megatons of Carbon Dioxide (CO2) emissions annually sparking the debate of climate change and Bitcoins’ hand in this.