The value of bitcoin has plummeted and the energy consumption linked to this cryptocurrency has followed the same slope. However, the new situation is still not very encouraging for our planet.
Bitcoin is not doing well. The most popular cryptocurrency in the world is going through an unprecedented crisis that is resulting in a collapse in its value. Since early May, the price of bitcoin has continued to decline to register today at around $21,000 from some $69,000 in November 2021. At the same time, the energy consumption of the cryptocurrency has also collapsed.
According to figures published by the site Digiconomist.com, bitcoin mining now consumes 133 TWh per year. A particularly large gap compared to the 200 and some terawatt hours that the cryptocurrency was “burning” just a few weeks ago.
Mining less and less profitable
For those who don’t know, bitcoin mining requires solving complex mathematical problems using dedicated computers. The more the volume of bitcoins increases, the more the equations to be solved become complex and the more the machines dedicated to mining require power. As long as the value of bitcoin was high, server farms to this were profitable. Sure, they used a lot of energy and therefore inflated electricity bills, but the money earned from the operations covered the costs.
Except that with a bitcoin at around €20,000, the situation has changed completely. As explained The Verge, below €24,000, using more than 180 TWh/year is no longer profitable. The most energy-intensive machines are therefore withdrawn from the network, mechanically reducing consumption.
In times of global energy scarcity, it is rather reassuring to see cryptocurrency mining calm down. However, the annual energy consumption of bitcoin on a global scale is still equivalent to that of a country like Argentina. Still huge, but better than the previous situation where the global bitcoin network consumed as much electricity as all the server farms in the world, explains The Verge.
Dirtier energy than before
However, this situation is clearly not environmentally sound. Because if the energy debt of bitcoin has decreased, it is still very much higher than that of 15 months ago. In March 2021, the star cryptocurrency consumed around 80 TWh/year. At the same time, China banned mining in the country. As a result, the relentless have settled in other countries where the energy mix is much less favorable to renewable energies, inflating the share of fossil fuels.
The situation therefore remains ecologically catastrophic since the energy used for mining is dirtier than before. In an article published in the scientific journal Natureresearchers estimate that “bitcoin mining could be responsible for 65.4 million tons of CO2 per year, which is comparable to the emissions of Greece”. Nothing to rejoice about, then.
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