Bitcoin Energy Considerations

Some interesting statistics on bitcoin energy usage compared to other industries.

2020 Data: Household tumble dryers in the U.S. consume 108 TWh / year, while Bitcoin uses 62 TWh / year
2020 Data: Household tumble dryers in the U.S. consume 108 TWh / year, while Bitcoin uses 62 TWh / year
2021 Data: Gold production consumes 240 TWh / year, while Bitcoin uses 110 TWh / year
2021 Data: Gold production consumes 240 TWh / year, while Bitcoin uses 110 TWh / year

The general consensus is that any energy usage is acceptable so-long as it has valuable utility.

What is the societal value of bitcoin?

  • If Bitcoin is a replacement for gold (as a store of value) can we compare its energy usage to that of the gold industry?

  • If Bitcoin is a replacement for part of the global financial infrastructure, can we compare it to part of the financial infrastructure energy consumption?

  • If Bitcoin enables access to the billions of people who currently don’t have access to any banking services, at what energy cost would that be acceptable?

Here are some open-ended questions we invite readers to ask themselves when looking at the energy consumption of new technologies such as Bitcoin.

As the space is evolving fast, we should also be mindful of new technologies that might offer similar utility at a lower energy cost. For instance ETH proof-of-stake is an interesting alternative solution, however it’s current deployment is centralised around a handful of cloud providers which some argue make it subject to censorship. Some projects like Rocket Pool (https://rocketpool.net/) are helping mitigate this risk. When considering alternatives, make sure tradeoffs are not overlooked.

70% of ETH Nodes are hosted on AWS, Hetzner and OVH
70% of ETH Nodes are hosted on AWS, Hetzner and OVH

Sources:

https://www.weforum.org/agenda/2022/03/crypto-energy-consumption/

https://docsend.com/view/adwmdeeyfvqwecj2

https://twitter.com/MessariCrypto/status/1560068983390318594?s=20