Bitcoin Energy Use is OK, if it’s Green

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]…