Bitcoin: the currency that consumes more energy than Argentina

The landing of Bitcoin in 2009 has been as controversial as it is interesting for the economy. However, its consequences go beyond the economic, since now they transcend the environmental level. And it is that, given the data that is observed, it is feared that Bitcoin could be a great source of contamination.

With the introduction of Bitcoin, among other things, it was intended to be able to carry out transactions without requiring the services of financial intermediaries. For this, the cryptocurrency has used blockchain technology. This technology allows a large number of transactions at all hours and in safe conditions.

However, this same technology, according to data provided by the University of Cambridge, consumes excess energy. An energy consumption that, given the data observed, could threaten the environment. Although if we analyze carefully we will see how most of the energy used is renewable, due to the search for energy with reduced costs to be able to mine.

The Bitcoin “miners”

“Due to the energy it requires, Bitcoin could position itself at the level of the thirty nations with the highest energy consumption.”

In order to manage such a quantity of information, it is necessary to resort to the so-called “mining”. In other words, computers connected to the cryptocurrency network are needed, which validate a colossal volume of transactions.

Keeping these computers constantly connected entails a very high energy consumption. These computers can register such exorbitant consumption figures that they can even equal or exceed countries such as Switzerland, Finland or Argentina.

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Moreover, due to the energy it requires, Bitcoin could position itself at the level of the thirty nations with the highest energy consumption. Well, according to data offered by the Center for Alternative Finance of the University of Cambridge, we are talking about an asset that, in energy consumption, exceeds the 3 countries mentioned.

However, many of its defenders show that in the case of Bitcoin, to obtain electrical energy, renewable energy sources are used to a greater extent. A clear example is the case of China, where the so-called “miners” use hydraulic power from dams. Hence, in certain areas of the country the facilities of “miners” have proliferated.

Despite everything, the controversy remains on the table, since environmentalists consider that, despite the fact that the use of renewable energy sources is the majority, the energy consumption of this currency is very high.

An exorbitant energy consumption

“Experts argue that cryptocurrency is totally energy inefficient.”

As we know, these huge computers that remain permanently operational require an enormous amount of electrical energy. In figures, this is specified in 121.36 terawatt hours over a year.

Bitcoin has been on an upward trajectory in recent months, which has also led to an increase in the number of miners. In short, the increase in the value of Bitcoin brings with it a greater demand for energy.

All this has generated great concern from the environmental point of view, since the greater the number of miners, the greater the energy consumption and the greater the damage to the environment. This is the great argument of the most critical of Bitcoin, who argue that the cryptocurrency is totally inefficient from an energy point of view.

But, to what extent can this increase in the number of miners be detrimental? Well, if we look at a study published in Nature Climate Change, it is estimated that in 2017 pollutant emissions reached 69 million tons of carbon dioxide.

Going one step further, the effects on global warming could be even greater if the world used Bitcoin as a means of payment. In this hypothetical case, the world temperature would increase by more than 2ºC in a period of 22 years. A sign that, although it is a value that hopes to be used in the near future, it requires new methods if it wants to have a future in this new sustainable scenario.

Environment and cryptocurrencies

“There are those who claim that energy consumption could double if all cryptocurrencies were taken into account and not, as is done now, only Bitcoin.”

It is worth noting that Bitcoin is not the only cryptocurrency, but that there are a large number of cryptocurrencies, while new ones are constantly appearing. For this reason, in fact, there are those who claim that energy consumption could double if all cryptocurrencies were taken into account and not, as is done now, only Bitcoin.

However, in this great controversy about Bitcoin and pollution there are also those who maintain a less alarmist position. In this sense, they affirm that since renewable energies are more efficient and economical, and when miners use large amounts from renewable sources, pollution is lower. But as we said before, these claims are debatable.

Be that as it may, and once again, cryptocurrencies are once again at the center of controversy. As we know, there is a constant debate between the advantages and disadvantages of cryptocurrencies. From its use to the very operation of the cryptocurrency, Bitcoin has presented numerous debates that are still pending resolution. Meanwhile, and as with its regulation, the mining of Bitcoin continues to rise, while the demand for energy continues to increase. All this, while the concern on the part of society grows, insofar as the environmental consequences are more possible.

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