The explosive growth of Bitcoin and other cryptocurrencies has opened up a new front in the broader climate crisis by threatening to offset the progress made in recent years toward decarbonization. For the technology to gain wider adoption over the long term, its proponents will have to get serious about reducing its energy usage.
LONDON – In May 2021, Tesla founder Elon Musk announced that his company would no longer accept Bitcoin, owing to its massive energy consumption and heavy reliance on fossil fuels. Musk had a point. The mining process to validate a single Bitcoin transaction leaves a larger carbon footprint than nearly 1.8 billion Visa transactions, and the evidence suggests that more than 70% of Bitcoin’s global energy consumption is generated from non-renewable sources such as coal. As Bitcoin’s market capitalization grew from $70 billion to over $1 trillion between November 2018 and November 2021, its annual global energy consumption increased fourfold, to more than 200 terawatt-hours (TWh).
LONDON – In May 2021, Tesla founder Elon Musk announced that his company would no longer accept Bitcoin, owing to its massive energy consumption and heavy reliance on fossil fuels. Musk had a point. The mining process to validate a single Bitcoin transaction leaves a larger carbon footprint than nearly 1.8 billion Visa transactions, and the evidence suggests that more than 70% of Bitcoin’s global energy consumption is generated from non-renewable sources such as coal. As Bitcoin’s market capitalization grew from $70 billion to over $1 trillion between November 2018 and November 2021, its annual global energy consumption increased fourfold, to more than 200 terawatt-hours (TWh).