Bitcoin Energy Use is OK, if it’s Green

Gregory Walfish
3 min readMar 26, 2021

The market capitalization and price of Bitcoin has risen significantly in the past 12 months, representing approximately a 700% return. This increase in price is due to simple supply and demand economics. Many factors contributed to this increase in demand. Investors fear inflation and as governments continue to release stimulus packages inflating the dollar, investors have turned to assets like gold and Bitcoin to protect their wealth. With this exponential growth in users and Bitcoin’s resulting price, it is important to evaluate how the Bitcoin network is powered. Supporting Bitcoin mining and its transaction system requires a vast consumption of energy and CPU time to function [5]. As Bitcoin continues to rise, we must be aware of how big this impact is and find ways to minimize the harmful emissions produced by it.

In order to calculate Bitcoin’s energy footprint, we will start by analyzing individual transactions. To put in perspective the amount of energy used: One Bitcoin transaction uses the same amount of energy as 536,494 VISA transactions equivalent to 797.39 kWh, which is enough to power a house in the US for about month [1]. The reason Bitcoin uses so much energy is due to the amount miners competing for new Bitcoins. Miners use specialized hardware devices to solve mathematical problems which requires a vast amount of energy and receive Bitcoin as a reward [7]. While doing this act of mining, they are also processing and confirming transactions on the network and earn transaction fees for the service. Once all 21 million Bitcoins enter circulation, miners will still be incentivized to continue with transaction fees [3].

Bitcoin is here to stay and the legal landscape and barriers to enter are continuing to get better. This year many public companies have added Bitcoin to their balance sheet, including Tesla, the fifth most valuable company in the world. If more companies follow, the price and adoption will continue to rise, and we have to find ways to minimize the environmental impact. Currently Bitcoin’s carbon footprint is the equivalent to that of Switzerland [1]. The main way to minimize this footprint is to put resources towards sustainable mining [8]. Using renewable energy is a great way to do that. In Quebec, we have cheap hydroelectric renewable power and have become a destination for miners to save on…

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Gregory Walfish
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McGill Software Engineering Student