Bitcoin Miners Equal Hungary’s Energy Consumption in 2018

Alex de Vries revealed that Bitcoin miners consumed as much energy as Hungary last year. The researcher at PricewaterhouseCoopers (PwC) in the Netherlands looked at Bitcoin’s global energy consumption in 2018. He discovered that current hydropower projects were insufficient to sustain crypto mining operations. He noted that the Bitcoin network required as much as 62.3 TWh power, a scale which could single-handedly serve Switzerland or Hungary.

The findings came after years of debates on whether or not Bitcoin is anti-environment. The decentralized financial network is being criticized for adding to global warming as every node in the system needs electricity to sustain itself. It results in the whole mining operation producing heat and increasing power demand generated by fossil power plants.

Supporters claim that banks are consuming way more resources with a high carbon footprint. According to them, banks use environmental-unfriendly chemicals to issue paper cash, allow their staff to travel with gas-inefficient armored cars, consume power with their location-bound branches and server warehouses, etc.

However, de Vries reported that Bitcoin miners consumed 12,000 times more resources than the highest carbon footprint of transactions processed by the banking sector. The researcher added that although Bitcoin enthusiasts switched to renewable energy, it did not address the issue.

Per de Vries, Bitcoin mining operations would always require energy even if they switch to renewable energy. He cited the hydropower plants in the Sichuan province, which were producing three times more power in wet summer months compared to the dry winter season. These plants utilized coal-based energy to satisfy miners’ demand, considering the crypto mining operations were not designed to close before they yield profits.

“Based on these findings, the renewable energy currently used in bitcoin mining cannot be considered ‘green’, and this challenge of combining a constant energy requirement with a variable production of renewables will always exist,” de Vries said. “It could even provide an incentive for the construction of new coal-fired power plants to meet the higher base demand.”

Northwestern University energy modeling scholar Eric Masanet said most Bitcoin/global warming studies had significant fundamental flaws. “While the future growth of cryptocurrencies like bitcoin is highly unpredictable, we do know that the global electric power sector is decarbonizing and that information technologies—including cryptocurrency mining rigs—are becoming much more energy efficient,” he wrote. “It appears the authors have overlooked these trends in their projections, while simultaneously insisting on tremendous growth in cryptocurrency adoption, resulting in inflated and dubious estimates of future carbon emissions.”