How Much Electricity Does Cryptocurrency Mining Use? According to preliminary estimates released by the Energy Information Administration, this could exceed 2% of all electricity in the United States. More specifically, “annual electricity usage from virtual currency mining probably equates to his 0.6% to 2.3% of US electricity consumption.”
Using data on Bitcoin from the Cambridge Center for Alternative Finance, EIA specifically found that, at least as of January 2022, almost 38% of all Bitcoin mining was This is occurring in the United States, where we were able to produce estimates of electricity usage for Bitcoin mining ranging from 25 terawatt hours to 91 terawatt hours. This is approximately the same amount of electricity consumed by approximately 3 million to 6 million households. That’s roughly equivalent to the electricity consumption of Utah or West Virginia. This range is wide because it is an imprecise measure of how active crypto mining operations are based on Bitcoin price and other factors. The world’s electricity consumption based on these estimates is “approximately the total electricity consumption of Greece or Australia,” the EIA said.
So why does Bitcoin consume so much electricity?
In a sense, Bitcoin is teeth electricity. Cryptocurrency is “mined” (i.e. new Bitcoins are generated) through a so-called proof-of-work system. This is essentially a way to prove that a computer (or indeed many computers) has performed a large amount of computation. This computational work maintains the entire system, and new Bitcoins are the reward for this decentralized maintenance. (Many other cryptocurrencies also use proof-of-work systems when minting new coins, but a notable exception is Ethereum, which last year introduced a low-energy, so-called “proof-of-work” system.・We switched to a “staking” system, which Ethereum’s leadership said, “the blockchain is “green.”
All such calculations are incredibly energy-intensive, which is why crypto miners are turning to cheaper energy sources. Sometimes the cheapest energy available is no energy at all. Bitcoin mines in Texas are part of a demand management program run by ERCOT, the state’s electricity market, which allows them to collect large payouts if they fail to operate during times of high demand for electricity.
This energy consumption has been a frequent point of criticism for crypto-skeptical advocates, activists and lawmakers, and the EIA announced earlier this week that it would begin collecting its own data on crypto mining.
EIA has discovered 137 crypto mining facilities so far, with some of the largest facilities located in Texas. However, this was only done by scanning public data. Earlier this week, the EIA announced it would conduct “mandatory research” to better understand the energy needs of cryptocurrencies.