The Cambridge Bitcoin Electricity Consumption Index (CBECI) is a tool developed by the University of Cambridge’s Centre for Alternative Finance, that has recently revealed that Bitcoin mining has consumed close to 0.28% of the world’s total electricity supply.
Every year, 61.76 terawatt-hours (TWh) of electricity are channeled to Bitcoin mining according to the CBECI.
To put this into perspective, the Czech Republic, a nation state with approximately 10.58 million citizens as of 2017, consumes 62.34 TWh. Switzerland, with its 8.42 million citizens consumes 58.46 TWh.
By comparison, if Bitcoin was a country it would be the 41st of 195 countries, when ranked in ascending order of the most to least energy-demanding nations.
How does this happen?
Bitcoin is mined through a process called mining which involves solving a series of complex puzzles.
Machines with high processing power are dedicated to mining.
To mine as much Bitcoin as possible, several miners (machines) are collected to one network. In some cases people fill up entire warehouses with miners for this purpose.
It is only expected that with such set ups all over the world, all of them running every single hour of the day, every day, in perpetuity, the electricity consumption would only be stratospheric.
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To reduce the overhead costs such as electricity and cooling, some people have moved their mining operations to countries like Iceland. Iceland’s electricity is sourced from geothermal energy, which is significantly cheaper. The cold air around the Arctic also reduces the cooling costs.
Climate change advocates have raised concern over the 22 megatons of Carbon Dioxide emitted during the process of Bitcoin mining.
