The Rising Volume of Crypto Mining Notes a Consequential Surge in Electricity Consumption

Electricity consumption rises significantly as the volume of crypto mining surges
  • The energy needed to produce Bitcoin soared significantly during its historic rise
  • Bitcoin mining is an enormously energy-intensive process
  • Environmentalists suggest that mining is a significant issue of concern 

Last year, it’s not just the value of Bitcoin that surged; the amount of energy that Bitcoin mining consumes also rose significantly.

The direct correlation between crypto mining and energy consumption

The cryptocurrency’s worth recently plunged after exceeding a record high of $50,000. However, the energy needed to produce Bitcoin soared significantly during its historic rise. 

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The Cambridge Bitcoin Electricity Consumption Index, a Cambridge University tool that calculates the currency’s energy consumption, recently generated some verification. According to their research, the energy input climbed up to become an equivalent of the yearly carbon footprint of Argentina.

The emerging interest from major Wall Street firms like JPMorgan and Goldman Sachs probably contributed to the currency’s surge in value. Moreover, approval from Tesla’s Elon Musk helped reach its recent high as traders predict the cryptocurrency is likely to become more widely adopted soon.

While the recent plunge proved to be a blow at Musk’s fortune, Bitcoin also acts as a threat to the company’s focus on a zero-emission future. It raises crucial questions for governments and institutions looking to restraint their carbon footprints.

The detailed process of Bitcoin mining

Bitcoin mining refers to a process in which a Bitcoin is allocated to a computer that solves an intricate series of techniques. Thus, it is an enormously energy-intensive process.

Initially in Bitcoin‘s moderately short history, Bitcoin mining was possible on an average computer. But the way the creator set up the Bitcoin, the total volume of Bitcoin mining holds limits to it. The limit amounts to 21m. As the volume increases, the algorithms to collect a Bitcoin get harder.

Currently, mining requires distinctive computer equipment that can manage the acute processing power essential to get Bitcoin. These special computers require a lot of energy to function. 

Benjamin Jones, an economics professor at the University of New Mexico who is researching crypto’s bitcoin’s environmental impact, stated that the amount of electricity utilized for mining Bitcoin stands more than the regular electricity used by entire countries.

Advocates of bitcoin refute by arguing that mining uses electricity from renewable sources as that form of energy becomes less expensive. Environmentalists suggest that mining is still an issue of concern, precisely because miners are likely to reach spaces where electricity is cheapest, including locations that use coal.

However, Bitcoin‘s advocates believe that any environmental costs required for mining bitcoin are worth the benefits that the crypto asset provides to society. But with bitcoin still leading and with support from established institutions and investment banks, the currency’s environmental effect is only likely to advance.

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Ritika Sharma
Ritika Kumari Sharma is an Economics Honors graduate from the University of Calcutta. She is completely into finance and believes that cryptocurrencies are the future. She is an enthusiast learner about the cryptocurrency and blockchain technology.

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