Cryptocurrencies are high energy consuming assets, and Bitcoin is expectedly the highest consumer. However, the recent research by the University of Cambridge is something bigger than most would have expected. Bitcoin consumes more electricity than the entire nation of Switzerland.
As of now, the Bitcoin network consumes over 7 gigawatts per hour, which amounts to over a mindboggling 64 terawatts a year. In comparison, the entire country of Switzerland consumes just 58 terawatts annually, while Colombia consumes about 68 terawatts. Overall, Bitcoin consumes about 0.25% of global energy consumption. That’s equivalent to the power destroyed all tea kettles for more than a decade.
Proportionately, though 0.25% may seem very less, when converted to the number of users, the energy consumption per user is exorbitantly high. Currently, there are about 30-50 million people using bitcoin globally, which is a fraction of the total number of investors involved in financial markets.
As the number of Bitcoin users grows, which definitely will, the consumption is likely to increase multi-fold. And in a world of depleting fossil resources, this isn’t particularly good news. However, Bitcoin mining, which is this most power hungry activity, is steadily moving towards sustainable sources of energy like solar power.
Countries like Iran, where electricity is expensive, have already started to put a curb on Bitcoin mining in the country, by charging prices higher than the general public. The growing power consumption, if not checked, could create huge forex deficit for such countries. The industry, too, realizes the environmental damage it could do, and hence new technologies are being developed to make low mining energy consuming affair.