Bitcoin Power Consumption Put Into Perspective

Posted on: December 12th, 2017 by jms No Comments

The rise of Bitcoin’s popularity and price has, of course, resulted in the rise of Bitcoin mining, which in turn has resulted in the rise of the necessary energy it takes to mine for these new digital assets.

 

There have been claims that the total energy consumption required for Bitcoin has risen above the total energy consumption of some countries. Newsweek.com even recently released an article titled “Bitcoin Mining on Track to Consume All of the World’s Energy by 2020“.

 

As with any form of sensationalism, when we hear fantastic claims like this, it is important to take a step back and use some critical analysis before we accept it as truth. So before Bitcoin is pegged as the death of our environment as we know it, let’s take a look at some of the other ways we consume energy and compare that to Bitcoin’s total energy consumption estimates.

 

 

Mining Energy Consumption for Gold and Other Metals

 

According to a report on energy.gov, the total energy consumption used each year to mine for gold, silver, iron, copper, and other metals is around 552.1 Trillion Btu’s. Which is roughly 44% of the total US mining industry, which is currently estimated at 1246.3 TBtu. So this doesn’t account for other areas of the world where metal mining occurs.

The energy consumption needed to mine for coal comes in at a close second, reaching around 485.3 TBtu, or roughly 39%.

 

 

Energy Consumption for Air Travel

 

According to eia.gov, the total energy use for air travel around the world for 2017 was around 11.6 Quadrillion Btu’s.  The total energy used for all types of travel, including cars, busses, and trains was around 67.5 QBtu in 2017, with 48.5 QBtu coming from light duty vehicles (AKA passenger vehicles like cars).

 

 

It’s important to note that 1 Quadrillion Btu (QBtu) is equivalent to 1,000,000 Trillion Btu (TBtu).

 

 

Energy Consumption for Global Manufacturing

 

According eia.gov, the total energy used in 2017 for energy-intensive manufacturing was 164.3 QBtu. For non-energy intensive manufacturing it was 43.2 QBtu, and for other industrial energy use it was 32 QBtu, totaling 239.5 QBtu for 2017.

 

 

Energy Consumption for Decorative Holiday Lights

 

According to energy.gov, the united states uses up about 6.63 TWh, or 22.6 TBtu per year on decorative holiday lights.

 

 

Energy Consumption for Bitcoin

 

Now, according to wired.com, it is estimated that Bitcoin mining requires around 4 TWh per year, or 13.7 TBtu. So when we put this into perspective, we can see that Bitcoin mining consumes far less than most of our traditional sectors of energy consumption.

 

 

The chart below gives a better visual of the comparison.

 

 

 

 

 

 

Here’s a look at the same chart without the 2 huge outliers, Manufacturing and Travel…

 

 

 

Energy Consumption of the Global Banking System

 

According to bitcoin.com, it’s also estimated that the total global banking system consumes 650 TWh or 2217.9 TBtu annually.  While it’s hard to verify this claim, it is certainly not inconceivable that the energy required to power financial systems around the world is very high, especially when we consider every bank facility, every ATM, every online and offline transaction, every e-commerce website and the data centers behind them, and every major countries individual market and stock exchange. So it was worth doing a comparison on what is probably a conservative estimate of the Global Banking System.

 

Here’s a visual of how Bitcoin energy consumption estimate compares to the overall Global Banking System energy consumption estimate…

 

 

 

 

As we can see, Bitcoin is no more than a tiny blip when we consider where most of the worlds energy consumption really goes. So if you do have legitimate concerns about energy consumption, as we all should, you may want to first consider turning off your Christmas lights, canceling your next vacation flight, or start riding a bike to work, before looking to blame Bitcoin mining.

 

When we put things in perspective it turns out that Bitcoin may actually conserve massive amounts of energy compared to its counterparts.

 

 

 

 

ADDITIONAL REFERENCES