How much energy does Bitcoin use?

24/May/2022

All Currencies have a cost & indeed should have a cost. Banks and Gold require electricity, Fossil fuel & staff. Bartering has the hassle of converting cows to fractions of houses plus remembering who owes what to who and maybe having to forcefully remind them when they conveniently forget.
As an environmentalist, Bitcoins energy consumption & environmental impact is an issue close to my heart and as a Bitcoin miner & electrician I feel reasonably well qualified to guesstimate its energy consumption. I've found it uses way less energy than gold mining & banks but more importantly WAY less Green House Gasses !

Bitcoin power consumption

Watts = Hash x Efficiency + 1% Cooling & Lighting

Annual power consumption = GW x hrs/y

x J/Ths x 1.01 = GW

Power: TWh per year

Above is a live Bitcoin BTC ONLY calculation. We do not need to know profitability, location or anything else as these things will be reflected in the following variables.

World Hash rate - this is a known but fluctuating quantity
Average miner efficiency - (see below)
Cooling & Lighting etc. Venting 1 megawatt of heat is going to require some big fans, by far the biggest extra adding roughly 1% to the electricity consumption.

For comparison the Three Gorges Dam has a generating capacity of 22.5 GW

Bitcoin CO₂ Emissions

Carbon intensity
According to the Bitcoin Mining Council report Bitcoin global mining industry’s "sustainable" electricity mix had grown to approximately 58.5% roughly 222 tCO₂/kWh . For comparison the average UK carbon intensity for 2020 was 181gCO2 /kWh.

Bitcoins Green House Gas emissions - Compared

Bitcoin vs World emissions

Yes, barely shows !

Bitcoin vs Gold vs Bank vs Farming CO₂e Emissions

Mitigating factors to be considered such as -

Space heating & District heating schemes or heating a swimming pool is power that would be consumed anyway
Methane Mining - Previously vented Methane converts CH₄ to CO₂ so is actually reducing CO₂e (see below)
Load switching agreements with power plants to turn off mining equipment when domestic demand is high, providing more incentive for over build on renewables.
Reduction in emissions from the competition
Degrowth - Curtailing investment in fossil fuels (see below)

As you can see above - If Bitcoin replaces just banks and Gold, Green House Gases could be considerably reduced, then add in banking investments & a reduction in the Military things get really interesting !
It seems to me that Banks are "lending" a virtually infinite amount of money to launder / plunder the worlds resources in the guise of business to enrich themselves. Only Bitcoin can fix this.

Hash rate varies due to the following factors -

Electricity prices
Mining bans
BTC price
Demand response schemes
Mining powered by Hydro during the wet season, moved elsewhere during dry season

Mining ASIC average efficiency

ASIC efficiency varies due to the following factors -
All makes and models of ASIC equipment have been listed (many thanks to "anonymous otter"). I added the estimated quantity of ASICs produced & multiplied it by the estimated up time the mines are in operation then matched it to the current total hash rate. This can then be used to approximate the average hash efficiency.
New mining gear will be driven hard, then sold when less profitable to amateurs, home miners, hobbyist & home / business heating. A brand new mine in an industrial mining unit would have much more up time say 98% than an amateur using a 5 year old ASIC for heating say 30%. Older machines may be deliberately retired with a sledgehammer. Selling cheap hash power to the competition could impact your bottom line.

Mining equipment varies in performance-

Amazing performance < 21 J/TH yet to be released may be being "tested" by the manufactures
Newly released 21.5 - 29 J/TH
Older less profitable 30 - 56 J/TH
Obsolete 57 - 100 J/TH
Really Old Junk 100 - 765 J/TH

The difficult bit of these calculations is finding the networks entire average ASIC hash efficiency (J/TH) & more particularly finding how many of which model have been sold / are still in operation. Occasionally we get glimpses of sales in the 10-100s of thousands of units (Yellow highlight).

Marathon 78,000 S19 XP 140T 21J/THash
Marathon 30,000 S19j 100T 30.5 J/THash
MicroBT 600,000 M20 46-49.4 J/THash

This is the most likely miner array which results in an average
37.3 J/TH = 8.2GW = 71.9TWh/y

Trying to make as bad as possible, running out dated ASICs in greater quantities than were manufactured 24/7 still =
50.2 J/TH = 11GW = 96.7TWh/y

Disproving other wild energy claims

If we take higher mining power consumption yearly estimates such as -

Cambridge estimate of 130 TWh/year & work backwards it would show the mining network to have an average efficiency of 67.5 J/TH (see green column) = Antiquated 5 year old inefficient gear.
Digiconomists estimate of 204.5 TWh/year = 106.1 J/TH = 🤡 Utterly ridiculous & also claim 40k tonnes of e-waste every year. If we add all ASICs ever made the all time total is 43kt, so more spurious claims via an account run by a employee of a Dutch Central Bank (no conflict of interest there then 🤔).

Claimed Power consumption / Hours a year = Watts / World Hash = Average J/TH
 204.5 TWh / 8760 = 23.3 GW / 220,000,000 TH = 106.1 J/TH

Conclusion

No serious miner is going to mine at a loss with antiquated junk when there is equipment that is 4-6 times more efficient on the market
There simply wasn't enough antiquated junk made to support the current hash rate
Newer more efficient ASICs 20.8 - 40 J/TH will dominate the bulk of the hash rate.
In the 2 or 3 years I’ve been following, Bitcoins network power consumption has plateaued at around 6.5 - 9.5 GW
Hash rate has increased due to more efficient machines - NOT more power consumption.

Where does Bitcoins energy go ?

Bitcoins power consumption serves three purposes

Mining new coins (Block reward) 99.48% (Like mining gold out of the ground)
Performing transactions (Transaction fees) 0.51% (Like melting, verifying /distributing gold bars and coins)
Blockchain nodes almost 0% (Like an accounting ledger)

By 2028 over 98% coins will be mined and in circulation, by 2140 virtually all Bitcoin will be mined. Subsequent Halvening's coupled with Tech advances will make it much easier to simply buy rather than mine, the power consumption should drop as the block reward drops & the tech entry level increases. Miners will then be mostly hashing for increasing transaction fees + a increasingly tiny block reward, the "Gold Rush" will be over considerably reducing power consumption. Leaving the world with a much more slimline incorruptible economic backbone of world money.
No more bailouts ! The real cost of Banks.

Bitcoin cost per transaction

Great info here from bitinfocharts.com

Fiat needs constant growth - Bitcoin incentives thrift !

This simple changing of incentives could rewire the human psyche. People become incentivised by thrift rather than consumption. The benefit of de-growth to the climate cause could be immeasurable.

The Cantillion Effect

The closer you are to the money printing press the richer you are likely to be. Why is it that we can buy beans grown in Africa, picked - put in a plastic package - ship round the world, cheaper than growing in our own gardens in the US/UK ? Or minerals mined cheaper than in our own countries?
Simple

Start

Print Money
Buy stuff from poor people - China, Africa, South America etc
More money = Money has less value
Devaluing money must be invested to maintain value
Invested money generates GHGs
Investments must be protected by Military
Military Generates GHGs
Printing money impoverishes the poor increasing wealth and income gap
Poor have to work for Industry
Goto Start

The developed world has all the stuff. The undeveloped world has lots of rapidly devaluing paper money. We are resource rich they have little. Not only is it the biggest scam ever invented it has many negative effects-

Rewards rich & powerful
Finances war
Causes Hyper Inflation in small countries
Job Exportation - Disincentivises Businesses from operating in the West
Exporting waste
Resource wasteful
Exploits any country or class of people that do not have access to the money printer. It's tempting to call this RACISM but I prefer to call it EXPLOITATION as this scam applies to all races.

What would be the Green House Gas reduction in ending the West’s money printing scam?

Bitcoin & Technology.

In the future Technological improvements will increase the hash rate, and not so much brute Wattage.

2009

In 2009 you could mine on a regular PC
97,000,000 J/THs

2022 - Bitmain S19 XP

Mining now is only profitable on dedicated hardware such as a Bitmain S19j ASIC (Application Specific Integrated Circuit) 3030 Watts
21.5 J/THs. Cost $10,000

Roughly 40,000 tonnes of ASIC mining machines have been manufactured in total. Approximately half of that mass is still in use. If these replace heating units, much of this could be offset by not manufacturing boilers, storage heaters etc.

Bitcoin & ESG (Environmental Social Governance)

Unexpected Benefits

Reducing Banking investment in Oil & Gas (Divestment)
Like Gold - Backing a devaluing currency
Reduction in CO₂e from the Banking Sector its self
Reduction in Methane from the Oil & Gas companies
Balancing the grid Bitcoin miners say they’re helping to fix the broken Texas electric grid — and Ted Cruz agrees
Driving advances in more efficient computers
Struggling Pension funds are getting great ( 200%pa ) yield from Bitcoin EG Grayscale
No need for a pension, just buy Bitcoin instead
Provide low cost heating via home mining
Digital services such as Email may in the future cost a small amount of sats to send. NO MORE SPAM !
Video may cost a few sats. NO MORE ADDS !

Other Benefits

Ending any monopoly on the world reserve currency.
Banking the "Unbanked". The developing world could skip the whole banking thing.
Not having your savings devalued.

Imagine one of these Bitcoin mining units connected to your local swimming pool, subsidising financially & heating the water, but also load balancing the grid.

10 REASONS BITCOIN IS GREEN

Much of Bitcoins energy is derived from "sustainable" sources (58%).
Bitcoin does not invest. Banks have invested huge amounts in Oil & Gas.
Bitcoin (Money that increases in value) encourages people to save not consume.
Printed money tends to go to pay for big ticket items such as The Military, Nuclear Power stations, Coal fired Power stations.
Bitcoin Incentivises renewables. Previously, excess renewable capacity was simply switched off or curtailed, now it can be sold to Bitcoin mining farms.
Second use of heat from Bitcoin mining can be used for space heating.
Previously vented Methane can power Bitcoin mining, converting it to CO₂ a much less potent green house gas.
Low/Negative interest rates in paper money encourage spending beyond peoples means I.E. borrowing to buy property as a speculation, which in turn push up property prices beyond the savers ability to pay. Increased property prices encourage more borrowing against property thats risen in value feeding the loop. The result is savers loose out. Thriftiness is discouraged.
The initial mining "gold rush" may be over. Mining may not be as profitable as simply holding any more. With only approx 2m bitcoins left to mine it may be just as easy to buy.
As the block reward decreases mining may decrease significantly.

Second use of the heat

Heat is a by product of Bitcoin mining. The heat from 1 modern ASIC is typically 1.4 - 3.3kW & can be used to heat homes & businesses. Use Green electricity and you have a Zero emissions heater that makes MONEY ! Electricity is converted too heat, if its £50 heater or £7500 ASIC the result is the same. Currently Bitcoin consumption is capable and in many cases is - heating up to 3 Million homes & businesses

Bitcoin incentivises Green energy !

Giving a very useful outlet for excess wind, solar (see Sunexchange) and hydro power. In the UK and Germany people are actually PAID TO CONSUME excess wind power, imagine getting paid twice to use power!
In the UK Octopus Energy Agile tariff can go to -3p /kWh. The mining equipment does not need to run 24/7 and can be quite happily turned off when little renewable energy is available. Load switching/ balancing is hugely advantageous to renewables.

Bitcoin vs Gold

The Gold industry produces 126MT CO₂ Annually
Gold mining =

Fossil fuel orientated
Destructive to the environment
Requires heavy machinery
Machinery has a high carbon footprint
Downstream Consumption

In 2013 it took 25.8 gallons of Diesel to produce 1 ounce of gold !

Bitcoin tends to use the cheapest electricity which is usually the greenest EG excess power from

Excess Hydro
Wind
Solar
Geothermal energy from Iceland. Waste heat is then reused for heating homes.

Bitcoin vs Banks

This is a guesstimate of direct day to day Banking emissions - 70 MTCO₂e / year, however we also have to add to this the less obvious but much greater emissions resulting from the Finance sector with
UK Finance sector alone responsible for 805 MTCO₂e.

Financial Times - Banks feel the heat

For further comparison, the emissions from Wall Street financing tracked in the report are equal to what 432 million passenger vehicles spew into the air over one year

How do we add all the emissions that have gone into the "Petro" Dollar Pound or Yen ? Should we factor in emissions of the oil industry, the military & manufacturing? Bitcoin currently has 1/3 of the Banks emissions before factoring other variables.

Paul Krugman, an American economist famously said "the Dollar is backed by men with Guns". Governments with printed money fund the greatest CO₂e producing entity on the planet - The Military Industrial Complex.

These 38 Fossil Banks are among the biggest financiers of the fossil fuel industry. A handful have adopted policies excluding or restricting financing for some parts of the industry, but none have yet committed to stop funding fossil fuels altogether.

If we're lucky the banks show us there scope 1 & 2 emissions but never like to show the detail. They will gladly tell you how much they "reduced" by & how everything is 94% renewables or "offset". So Id take everything with a massive pinch of salt.
From Barclays ESG Report below (page 45)

HSBC Bank direct (Scope 1 & 2) emissions from their ESG report. The remarkable reduction is mainly due to Covid.

Stranded Energy

In the Oil and Gas industry, previously “stranded” energy in the form of Methane has been flared or worse, vented. Methane is 86 x more potent Greenhouse Gas than CO₂ over a 20 year time frame. Now the gas is being increasingly used for bitcoin mining. Burning the gas efficiently to produce electricity is a net climate positive as long as its using existing flares and Vents. This has huge potential for CO₂e Reduction of the Oil & Gas industry !

Ironic that the Oil & Gas industry could be self incentivised to clean up it own mess.

EXON Mobil trail mining bitcoin.

Gas-to-Bitcoin Mining Firm Crusoe Energy Systems Raises $505 Million

Crusoe Energy Systems working on a gas-to-bitcoin mining pilot with the gas giant Exxon.

How Bitcoin Mining Is Disrupting Global Energy Markets

https://denverbitcoin.medium.com/

Buying vs Mining

As the price rises will Bitcoins energy consumption rise ?

I think we may actually be at peak mining energy consumption for the following reasons.

Mining equipment has got really expensive - $11,620 for Bitmain S19 xp
Typically Bitcoins value increases roughly 140% every year ! Compound interest rates on steroids !
Instead of investing in mining equipment, wages, electricity over the next few years, with a rapidly rising price it may simply be much better investment to simply buy BTC IMMEDIATELY .
Research & development for the next generation of ASIC's is even more expensive than mining.

In the early days the mining reward was much greater ( 50BTC ) so was worth the investment, but now if you are a company like Bitmain looking to invest in Research & Development to bring the next generation of ASIC to market, would you employ staff, buy machinery costing millions$ or simply buy & hold and go on holiday and make FAR MORE money?

I do not see a huge increase in mining energy consumption and quite possibly a reduction. ASIC mining gear is fetching highly inflated prices at the moment. Some people may actually sell there gear to invest in the coin its self. Hash rate may increase as old slow ASICs are replaced for new ones. Major innovations from Bitmain or anyone else seem a long way off at the moment.

Bitcoins Environmental impact Conclusion

If you really want to be green shut down -

Military Industrial Complex
Gold mining
Banks !

Bitcoin could do that without a shot being fired, how green is that ?!