A report from the U.S. Energy Information Administration (EIA) has disclosed that Bitcoin mining consumed 0.6% to 2.3% of the total U.S. energy last year.
The report discloses the electricity consumption of Bitcoin mining in the United States, utilizing data sourced from the Cambridge Bitcoin Electricity Consumption Index (CBECI). This index monitors the power demands of Bitcoin mining globally.
Per the report, Bitcoin mining constituted 0.6% to 2.3% of the total energy demand for the U.S. in 2023. For context, the entire country’s energy demand amounted to 3,900 terawatthours (TWh).
NEW: A report by the ?? US Energy Information Administration (EIA) reveals #Bitcoin ⛏️ mining uses 0.6-2.3% of US ⚡️ electricity, and 0.2-0.9% globally pic.twitter.com/SlOwljMtBa
— Bitcoin News (@BitcoinNewsCom) February 2, 2024
This rate implies that Bitcoin mining in the U.S. consumed more electricity than states like Utah and West Virginia. It also equates to the annual power consumption of over three to six million homes in the country.
Significantly, data estimates place Bitcoin mining in the U.S. between 25 TWh and 91 TWh, with the assumption that the U.S. maintains a 38% share of global Bitcoin mining. This share has risen from 3.4% in January 2020 to 37.8% in January 2022, as reported by the CBECI.
Notably, China, which accounted for over 72.69% of all global Bitcoin mining in January 2020, saw its share hit 21.11% in January 2022, as it relinquished its spot at the top to the U.S.
Recall that China banned Bitcoin mining in 2021, leading to a drop in share to 0% in July 2021. However, this metric picked up again, as individuals turned to underground mining. Despite the resurgence, China secures second in terms of global Bitcoin mining.
According to the CBECI, global Bitcoin mining accounted for 0.2% to 0.9% of the world’s electricity demand in 2023 of 27,400 TWh. This consumption is on par with countries like Australia or Greece. The CBECI reports that global Bitcoin mining used 67 TWh to 240 TWh of electricity.
Concerns Surrounding Bitcoin Mining
Reports such as this have been instrumental in assessing Bitcoin’s electricity demands across the world. This is due to emerging concerns about its environmental impact. Recall that Tesla stopped accepting payments in BTC due to these concerns.
Tesla & Bitcoin pic.twitter.com/YSswJmVZhP
— Elon Musk (@elonmusk) May 12, 2021
Per the EIA report, the CBECI employs a comprehensive approach to gauge the electricity demand of Bitcoin mining. This method relies on the average power consumption of various mining hardware types and assumes miners act as economic agents.
The report notes that the CBECI-based estimates are only for Bitcoin and do not include other proof-of-work chains like Dogecoin. Notably, other networks like Dogecoin use way less electricity than Bitcoin. While a BTC transaction uses 707 kWh, a DOGE transaction only uses 0.12 kWh.
Some crypto enthusiasts have expressed their preference for other chains due to Bitcoin’s energy demand. Some of these networks include XRP, Cardano, and Solana. Ethereum also switched from PoW to PoS to address energy concerns.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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