Bitcoin (PoW) Mining Energy Consumption

**TLDR:** Bitcoin mining currently uses \~0.1% of global energy consumption. Due to its competitive nature and unique properties, bitcoin mining leads to miners setting up or relocating its operations in areas with the cheapest sources of energy. This enables miners to use energy sources that have low demand, are off-grid, and/or would typically be wasted. Lastly, partnerships between energy producers and bitcoin miners provide an opportunity to enhance energy infrastructure and make otherwise unprofitable renewable energy investments profitable. This is further influenced by national and global energy consumption targets.

**Note:** The objective of this article is to summarize the content from 10+ sources. If anyone asks you about bitcoin energy consumption, I hope this will be a great resource to reference. I highly recommend reviewing the sources below to dig deeper into the bitcoin mining energy consumption rabbit hole!


Bitcoin mining has been accused of consuming a substantial amount of energy, typically comparing bitcoin mining energy consumption with that of countries or large companies. Because of its large consumption of energy, bitcoin mining drives up electricity prices for consumers, requires a large carbon footprint, and is causing environmental issues within communities (e.g. heating Seneca Lake in New York). If bitcoin continues to survive, energy consumption will continue to increase, which could be a threat to global warming. And what’s the point of bitcoin anyway? Its energy use per transaction is through the roof and is, therefore, a waste!

In this article, I will provide context to the claims mentioned above in order to illustrate that critics are misinformed about bitcoin mining and are not considering the potential long term benefits to energy infrastructure and the environment.

**Global Energy**

In 2019, the world produced 173,000 TWh (terawatt hours) of energy. It is estimated that about 33% of global energy was wasted during that time. Meanwhile, bitcoin mining consumed about 120-140 TWh.A, B

*Bitcoin mining consumes a very small amount of global energy.*

**Energy Consumption Comparisons**

Bitcoin consumes more energy than many countries consume, including Ukraine and Norway.C This statement sounds outrageous – how can bitcoin consume so much energy!? It is deceiving to compare bitcoin mining energy consumption to that of other countries without putting this into perspective. Large online platforms such as Google, Netflix, Facebook, and Amazon all use more energy than countries use. More surprisingly, the cruise industry, Christmas lights, household drying machines, and private jets use more energy than countries use.B Gold mining requires 131 TWh of energy.D For additional context, more comparisons can be viewed in the two charts below.

[Source: Cambridge Bitcoin Electricity Consumption IndexC](


[Source: Nic Carter, Demystifying BitcoinE](

*Bitcoin mining consumes more energy than some countries consume; however, without providing context, critics downplay the fact that many other appliances, seasonal traditions, industries, and companies also consume more energy than these countries consume.*

**Electricity Prices**

Bitcoin mining is highly competitive, which drives miners to search for the cheapest electricity. Profitable miners require much cheaper energy than the global average (\~14 cents/KWh), ideally 5 cents/KWh or less.A Cheap energy is only found in locations where there are no (or very low) opportunity costs and no (or very low) buyers. Bitcoin mining has unique propertiesF that enable miners to find this cheap energy:

1. **Location Independent:** Miner hardware is easily transportable and only requires an internet connection or cellular data. This enables miners to set up near renewable energy producers prior to the producers being connected to the grid, use off-grid energy (e.g. flaring), and use otherwise curtailed energy

1. *Example:* Before mining was banned in China, miners would move between provinces seasonally to use cheap hydroelectric power in the Sichuan provinceB
2. **Flexible Load**: Although potentially not profitable or not as profitable on paper (more on that later), mining downtime is not catastrophic to business operations such as server farms. Some hardware is able to power down while other hardware stays on at a few second’s notice, which offers unmatchable grid flexibility

1. *Example:* Texas grid operator can notify miners to power down hardware, which can be automated and completed in secondsG
3. **Scale Independence:** Mining hardware can be spread out globally; scaling does not require large amounts of hardware in one location

1. *Example:* One mining company can spread its hardware across multiple countries to use various cheap energy sources

Energy produced from oil, coal, and gas is not likely to be the target energy source of bitcoin miners due to the high opportunity cost of each of these resources. On the other hand, excess nuclear, hydroelectric, natural gas flaring, and other wasted energies have low opportunity costs.A

1. **Nuclear** energy is a consistent energy source that produces a surplus that can be used by bitcoin mining
2. **Hydroelectric** energy is expensive to transport, and the source can be found far away from population centers. Electricity cost is around 3-5 cents per KWh. In 2019, 4,306 TWh were produced
3. **Flared gas** is the methane gas produced as a byproduct from oil wells that are far away from pipeline infrastructure. The typical process to flare gas is expensive and inefficient, especially on windy days. Due to increased demand from bitcoin mining, mining companies have innovated a transportable technology that captures the gas, pipes it into a generator, and flares the gas for energy without releasing any gas into the atmosphere. Without this technology (and miners), flaring would release methane into the atmosphere, which is more environmentally harmful than carbon dioxide.H The opportunity for using flared gas is large – about 688 TWhD to 1,500 TWhA of methane could be flared each year globally. To add context, the US Energy Information Administration estimated that 150 TWh of energy was vented or flared per day in the US in 2019, which is enough power to supply all bitcoin miners. Working with miners to flare gas is a huge opportunity for energy producers because it enables them to score high Environmental, Social, and Governance (ESG) scores and meet state flaring limitsB
4. **Other Wasted Energies** such as geothermal in Iceland,D reopening hydroelectric plants in Canada that used to supply lumber, pulp, and paper mills, repurposing coal plants into natural gas plants in New York, and providing revenue to stranded power plants that are waiting on transmission line infrastructureB are cheap sources of energy that can be harnessed by bitcoin miners

At face value, solar and wind energies lack the consistency needed to mine bitcoin profitably; however, there are solutions that provide a symbiotic relationship between bitcoin mining and these energies in the short term (this will be discussed below).

Note: Bitcoin mining results in increased capital investment being dedicated to infrastructure that produces cheap electricity (due to its financial reward).A The repurposed coal plant mentioned above has received criticism from environmentalists that bitcoin mining has caused Lake Seneca to overheat. This is a one-off scenario in which bitcoin mining may be the main factor that led to the reopening and repurposing of a plant that is negatively impacting the local ecosystem. Bitcoin mining goes to where the cheap energy is. This is an opportunity for policy makers to craft legislation to protect local ecosystems. This is not and will not be the last time an old plant is reopened or repurposed.

*“Imagine a 3D topographic map of the world with cheap energy hotspots being lower and expensive energy being higher. I imagine Bitcoin mining being akin to a glass of water poured over the surface, settling in the nooks and crannies, and smoothing it out.”* Nic Carter

**Threat to Global Warming**

As stated in the sections above, bitcoin mining’s unique properties enable miners to find cheap energy sources that have a lower carbon footprint, would have been wasted, or provide a net benefit to reducing methane emissions. Solar and wind energies provide an unconventional opportunity for energy producers and miners. Initially, I was skeptical about solar and wind energies since they are not consistent sources of energy throughout the day or seasons. For these renewable energies to provide sufficient, consistent energy to consumers, energy providers need to overbuild solar and wind farms so that the minimum energy produced is able to supply consumers without blackouts. This is incredibly expensive because solar and wind farms do not have a buyer for the oversupply of energy during peak hours, and batteries are costly.

California and Texas have been in the news recently because their reliance on renewable energy caused blackouts.I In the past, neither of these states had recurring blackouts; however, their overreliance on renewable energy has created a systemic energy supply issue. Some of the solutions discussed are listed below:

1. Reopen nuclear and natural gas plants in California
2. Weatherproof nuclear and natural gas plants in Texas
3. Overbuild solar and wind farms
4. Implement a strategy that includes a mixture of the above options

Option 3 (or 4) has the potential to be cheaper and more feasible with the help of bitcoin mining. The timing of the construction of solar and wind farms and supporting grid infrastructure are not always aligned. If solar and wind farms are built but do not have sufficient transmission line infrastructure, bitcoin miners can buy the farms’ electricity.J, B This is a symbiotic relationship that provides revenue to the solar and wind farms and provides otherwise wasted electricity to bitcoin miners. Currently West Texas produces 32 GW of solar and wind energy, has a 5 GW load, and can transmit 12 GW of energy to laid centers outside of West Texas.H The outstanding energy is curtailed but could be a perfect energy source for bitcoin miners that increases revenue of the renewable energy farms.

Once solar and wind farms are constructed and have the supporting infrastructure to provide its energy supply to the grid, bitcoin mining can use its flexible load property to power down, as needed, in the case of an energy shortage.H Critics rightfully claim that bitcoin mining is only profitable if the mining hardware runs everyday; however, innovative contracts between energy supplier and miners have terms that exchange powering down temporarily for a rebate. Reducing energy demand within seconds is much easier and faster for grid operators than deploying ‘peaker plants’ (typically natural gas) to increase energy supply. This ‘controllable load’ assists with decarbonizing the grid and is in line with the International Energy Agency’s 2030 goal of dedicating 500 GW electricity to new demand response resources in an attempt to meet renewable energy goals and modernize the grid.G

Even with a rebate built into a contract between a miner and energy producer, there is still skepticism about whether miners would use this energy over other cheap energy sources since there is a risk the rebate does not cover the costs of powering down. This skepticism assumes all mining hardware is equal; however, this is hardly the case. Although new miners will use on-grid, cheap energy with high uptime (e.g. nuclear, hydroelectric), older mining hardware needs to use the cheapest power, which can be found in intermittent renewables. In 2021, Bitmain S9’s were 5 years old yet represented 30% of the mining network. Another consideration is that ASIC development cycles are slowing, which allows miners to search for cheap energy rather than periodically upgrading their hardware.H

Stranded power is an issue that not only occurs with overbuilding renewable energy but also when power plants are built in anticipation of users in a community (e.g. hospital, office). If the building plans fall through, there is an overabundance of energy in that community. Also, stranded power is a large problem in developing countries. This is an opportunity for developing countries to invest capital in energy resources and modernize their infrastructure.B

In summary, bitcoin mining’s competitive search for cheap energy enables renewable energy to be more profitable (waste less energy),H provides a quick-reacting demand response resource (resilient grid), reduces construction risk and grid congestion,K and allocates more capital to cheap energy. All of these factors will help modernize the grid, encourage investment in renewables (including fusion),L and increase the innovation and advancement in renewables.

More optimistic claims argue that the marginal cost of producing electricity may approach zero, and bitcoin mining could move us to a Type I civilization on the Kardashev scale (current estimate is 100-200 years from today).B, L A Type I civilization is defined as a civilization that “can use and store all of the energy available on its planet.”O

Although it is difficult to measure bitcoin mining’s global carbon footprint,M the Bitcoin Mining Council provides transparency for 36 companies that represent 46% of the mining network. A summary can be found below:


[Primary Energy Sustainable Power Mix: Bitcoin Mining vs Other Countries \(% of TWh\), BMC CouncilO](

Furthermore, it has been estimated that carbon emissions are on pace to be net zero or negative by 2031.D

*Bitcoin mining will subsidize renewable energy and strengthen and modernize grids, which will enable the world to achieve its climate goals.*

**Payments Comparisons**

Proof of work (PoW) critics like to compare bitcoin transaction volume with other established payments networks like Visa. This data can be extrapolated to say bitcoin transactions consume X% energy whereas Visa transactions only consume Y% of energy. Alex De Vries (former PwC Netherlands) is notorious for bashing bitcoin and PoW for being incredibly energy intensive per transaction and per block.B However, this is not a fair comparison of assessing energy consumption for bitcoin for the following reasons:

1. Bitcoin energy consumption should not be measured by transactions per second. Energy consumption remains consistent no matter how many transactions are confirmed in a block. This is similar to measuring the energy consumption of your computer by using number of emails sent as the metric (e.g. 10 emails/day vs 100 emails/day)B
2. Bitcoin (5-7 transactions per second) is a payments settlement layer and would be better compared to the Federal Reserve’s settlement layer Fedwire (10 transactions per second). Visa is a layer on top of Fedwire; lightning network (unlimited transactions) is most similar to Visa (claims between 1,700-24,000 transactions per second)B
3. Bitcoin’s energy consumption is a feature, not a bug. It ensures immutability of the blockchainL

Over time, bitcoin mining’s energy consumption increases at a slower rate than the increase in the total value secured by the system.L It is estimated that if bitcoin’s price increased to $1 million per bitcoin, bitcoin would still only use 0.6% of the world’s energy consumption. With this high valuation, bitcoin may have absorbed energy usually consumed from parts of the global banking system.B

At a high level, bitcoin’s energy consumption is capped; when the bitcoin price increases, energy consumption increases; however, every four years, the block reward is halved, which reduces energy consumption. The other part of the block reward (transaction fees) is limited by the threshold in which users would be unwilling to pay the fees.M

*Bitcoin energy consumption should not be compared to that of a payments layer (e.g. Visa); the energy consumption is used for bitcoin’s financial infrastructure that includes a settlement layer, payments layer(s), currency creation, incentives, and infrastructure security / immutability.*


A The Fiat Standard

B Bitcoin’s Energy Usage Isn’t a Problem. Here’s Why

C Cambridge Bitcoin Electricity Consumption Index

D The green case for Bitcoin

E Demystifying Bitcoin


G Bitcoin Mining Is America’s Most Misunderstood Industry | Opinion

H Bitcoin Mining Is Reshaping the Energy Sector and No One Is Talking About It

I blackouts

J Solar + Battery + Bitcoin Mining

K Bitcoin is Key to an Abundant, Clean Energy Future

L PoW is Efficient

M How Much Energy Does Bitcoin Actually Consume?

N Kardashev scale

O BMC (Bitcoin Mining Council) **Bitcoin (PoW) Mining Energy Consumption**

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21 thoughts on “Bitcoin (PoW) Mining Energy Consumption”

  1. Oooooor, and hear me out here, you could invest in solutions that are faster, require 1/1000th (or better) of the energy consumption, and allows your average working class Joe to earn passive income without depending on a dedicated energy hungry machine that has next to zero chance of scoring ANY passive income unless connected to a large mining pool. Cause nothing says decentralization like the vast vast majority of Bitcoin and Bitcoin income being in the hands of the superwealthy, amiright?

    Posts like this one just remind me of oil companies talking about how cool they are because they plant trees somewhere. It’s a bandaid solution and in absolutely no way resolves the core issues.

  2. Although I realize the audience of this subreddit, I just disagree. I understand Bitcoin uses relatively little energy in the grand scheme of things (compared to some other industries and transportation). If this one coin is using the same amount of energy as Thailand (#23), maybe we shouldn’t use it. I have seen reports that list the energy consumption closer to 1% (granted as you mentioned it hard to quantify this). Also right now, coal is the cheapest immediate energy source. Living in missouri (one of the highest coal consuming states) I can tell you anecdotally that coal energy is VERY cheap.

    I just don’t see why would we use Bitcoin (POW) versus Eth(when it turns POS) when we are talking about the energy consumption of the network.

  3. My question is though, why shouldn’t we use other cryptos (XRP, XNO, XLM, ALGO) which have better characteristics (faster, lower fees) and lower energy usage.

    People aren’t saying that we use energy perfectly (e.g. Christmas lights) but when substitutes are available, we should use them…

    This is normally responded to with ‘but Bitcoin is the most used/accepted’ – right, but let’s change that. Promote environmentally-friendly options. We’re doing that with EVs, food, power sources, why not crypto?

  4. >Bitcoin (5-7 transactions per second) is a payments settlement layer and would be better compared to the Federal Reserve’s settlement layer Fedwire (10 transactions per second). Visa is a layer on top of Fedwire; lightning network (unlimited transactions) is most similar to Visa (claims between 1,700-24,000 transactions per second)B

    Doesn’t something like lightning defeat the purpose of bitcoin?

    Like Bitcoin is supposed to be a completely decentralized thing, but then to deal with the downsides of being decentralized, you have to put trust within a sub-network? That seems backwards and moving towards a centralization.

  5. I feel like Bitcoin mining using energy that may otherwise go to waste (such as flared gas) is really cool because there wasn’t really a way you could make money off of it prior to btc

  6. Bitcoin uses a fraction of the energy required to keep the global financial system on and working. Think of all the banks and computers to keep the dollar flowing. Irs, banks, swift, and all those computers and cell phones on to ensure no identity theft.

  7. These facts are known and easily backed up with reliable sources.

    Meanwhile politicians in the EU parliament don’t understand or believe it. Being against something only because they don’t understand it.![gif](emote|emo_pack_1|wojakiss)

    Time for us to tell them and use the democratic system

  8. I hope a lot of people will read this, pretty well written!

    I have spoken about this topic few times but got downvoted for whatever reason.

  9. Yes we know and it’s shit how media is defaming Bitcoin but for real, do we really need PoW? Even now? When there are so many alternatives?

  10. The narrative is paying off for those working behind the scene. Telling people crypto and PoW is far worse for the environment than the current system (fiat), that it’s a waste of energy, and also that PoS is the answer. We spend energy creating raw materials and printing fiat and think of all the banks/ATMs/computers/vehicles/cash registers/etc. that go into processing/ transferring/storing fiat. No one calls the current system a waste of energy but yet they do with crypto. Also in my opinion PoS is just the same financial system we have currently but just in a digital form. If you have more money you have more control of a token/coin and it just becomes more centralized, even worse it may become more centralized to bad actors at times which we have already seen.

  11. BTC’s high energy consumption is the defense mechanism that makes the network secure and a feature of POW. The amount of energy required to attack the network serves as a deterrent to potential attackers. The larger the network grows and the more energy it consumes, the more secure the network becomes.

    Shoutout Jason Lowery and his theory on the natural power projection game we are all subject to and can’t unsubscribe from since it’s physics.

  12. Maybe I missed it in there, but what % of global energy would it take if BTC was used to process the same amount of transactions as Visa?

  13. Yes we know and it’s shit how media is defaming Bitcoin but for real, do we really need PoW? Even now? When there are so many alternatives?


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