Bitcoin has surpassed record energy consumption levels in 2019 according to reports from two independent energy indicator groups. Digiconomist Bitcoin Energy Consumption Index and Cambridge Alternative Finance Research shows that the premier coin reached the record ranges of 60-75 TWh around mid July.
Bitcoin has revolutionized the financial landscape but there are concerns about the environmental effect of its consensus method. Bitcoin uses the Proof of Work (POW) Consensus System for mining which is energy draining.
Bitcoin’s Proof of Work has been the subject of deliberations regarding the actual percentage of energy consumed during mining process. Countries differ in measurement parameters and other variables that need to be taken into account.
0.25% of Global Energy
According to Cambridge’s report Bitcoin consumes 0.25% of the world’s total energy consumption. When put into context, this is equivalent to what South American nation of Colombia consumes, with a population of 50 million.
For Bitcoin, this news is a bit embarrassing because the timing of its peak energy consumption coincided with high temperatures caused by climatic changes.
While the global community is striving to reduce energy consumption, Bitcoin’s soaring demand is certainly not good publicity.
The energy consumption of Bitcoin network is not entirely an indicator of its impact on the climate. Cambridge added in their report that about 20-70% of the energy used in mining Bitcoin is from renewable energy.
There may be pressure in coming years for new technology that would replace the current Proof of Works Consensus Protocol if the energy demand keeps soaring.