With more than 151 Twh of annualised electricity consumption, Bitcoin would, as of 14 May 2021, be the 25th most energy-intensive “country” in the world, ahead of Egypt and Malaysia, and behind Poland. This is according to data updated in real time by the Cambridge Centre for Alternative Finance. The source is not chosen by chance: it is the same one that Elon Musk used in his tweet justifying his resounding retreat on Bitcoin, no longer accepted as a form of payment to buy Teslas. This lasted for about a month and a half, and it has not been disclosed how many units were sold in Bitcoin.
Issues related to Bitcoin mining are steadily increasing: this is due to the growing computational power required to solve the cryptographic problems associated with the functioning of the blockchain, which is solved in exchange for a ‘premium’ in newly ‘mined’ Bitcoins. This is not exactly breaking news. But it is clear that Tesla’s green storytelling would not have been reconciled with the strong environmental impact of a currency that, moreover, few use as a form of payment.
For the record, on 24 February last, when the possibility of buying Teslas in Bitcoin was launched, the annualised consumption of the Btc network was 127 TWh, while on 12 May last, the date on which Musk withdrew this opportunity, consumption had risen to 149 TWh. Yet, already in February Bitcoin consumed more electricity than the whole of Argentina, a country with about 45 million inhabitants.
The situation is compounded by the fact, also known for some time, that much of the mining activity takes place in China, precisely because of the low cost of electricity – which is made possible by the inconvenient contribution of coal-fired power stations. According to the Cambridge Centre for Alternative Finance, 65% of mining activity takes place in China. And according to the latest data compiled by the International Energy Agency, as of 2018 China was drawing over 60% of its energy from coal and another 20% or so from oil.