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How Much Energy Does Bitcoin Consume?

How Much Energy Does Bitcoin Consume?

Here’s how energy-intensive Bitcoin’s Proof of Work consensus mechanism really is and what’s being done to offset it.

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Bitcoin Energy Consumption

Key Takeaways

  • Bitcoin’s energy consumption is a pressing issue, with annual estimates ranging from 91 to 150 terawatt-hours, primarily due to its complex Proof of Work mining process.
  • Comparatively, Bitcoin’s electricity consumption per transaction is significantly higher than that of Visa and Proof of Stake networks.
  • Despite the environmental concerns, Bitcoin’s fundamental Proof of Work mechanism is unlikely to change, as it contributes to its scarcity and network resilience.
  • Efforts to reduce Bitcoin’s carbon footprint include a growing use of renewable energy sources, accounting for over 50% of mining, and carbon offsetting methods like carbon credits and sequestration.
  • As the cryptocurrency industry becomes more environmentally conscious, green crypto projects and initiatives are emerging to address the environmental impact of blockchain technologies.

How Much Energy Does Bitcoin Consume?

Bitcoin requires a significant amount of energy, estimated to consume about 91 terawatt-hours (TWh) of electricity annually, which is more than Finland uses. Another estimate suggests that Bitcoin currently consumes around 150 TWh of electricity annually. 

According to the Cambridge Centre for Alternative Finance, Bitcoin consumes around 87 TWh per year (at the time of writing). The energy consumption of Bitcoin mining is a result of the complex process involved in creating cryptocurrencies, which requires specialised machines and a significant amount of computational power.

Electricity Consumption per Transaction

The chart below presents the comparison of the electricity consumption per transaction between Bitcoin, Ethereum, multiple Proof of Stake (PoS) networks, and Visa. It should be noted that this may not be a perfect comparison (e.g., Bitcoin’s energy consumption is not determined by transaction volume, unlike Visa); however, we include it here nonetheless for completeness. 

From the chart, electricity consumption per transaction of a PoS network is nearer to that of Visa, whereas Bitcoin and Ethereum Classic have much higher electricity consumption.

Why Is Bitcoin So Energy-Intensive?

Bitcoin’s energy-intensive Proof of Work (PoW) process involves solving complex mathematical problems to validate transactions and add them to the blockchain. This requires a significant amount of computational power, which in turn requires a substantial amount of electricity. Additionally, the decentralised nature of Bitcoin mining means that multiple miners compete to solve these problems, leading to higher energy consumption. As more miners join the network and the difficulty of the problems increases, the energy consumption of Bitcoin also increases.

Learn more about the Proof of Work consensus mechanism and Bitcoin mining.

Bitcoin was the first successful cryptocurrency, and PoW was one of the first types of consensus mechanisms, but many less energy-intensive consensus mechanisms have been developed since then. Ethereum, the second-largest cryptocurrency by market capitalisation, made the switch from PoW to the more environmentally friendly PoS in 2022 (the old PoW mining network lives on as Ethereum Classic). 

Many other early cryptocurrencies like Solana were also conceived on the premise of creating a cryptocurrency that consumes less energy than Bitcoin. Does that mean Bitcoin will eventually also change its consensus mechanism to a less energy-intensive one? Unlikely, as PoW is hard-coded into Bitcoin’s blockchain, and mining is a fundamental part of much of what makes Bitcoin unique. 

Mining ensures that Bitcoin remains a scarce commodity, making it more valuable than an inflationary one. And its complex consensus mechanism also makes the network more resilient against attacks.

Can Bitcoin’s Energy Consumption Be Reduced?

While Bitcoin’s energy consumption cannot be reduced as long as it runs on PoW, the energy can be 1) sourced from sustainable sources, and 2) offset.

Ways to Reduce Bitcoin’s Carbon Footprint

Almost 50% of Bitcoin mining already uses renewable energy, according to research by ESG analyst and investor Daniel Batten.

Bitcoin and Renewable Energy

According to the ESG study, 23.12% of all Bitcoin miners use hydropower to run their setups. 

Wind energy generates 13.98% of the power needed for Bitcoin mining, while nuclear/nonrenewable and solar account for 7.94% and 4.98%, respectively. A side note that the grouping of nuclear into clean energies is debated. Other renewable energy sources account for about 2.40% of Bitcoin mining.

This adds up to 52.4% of all Bitcoin mining relying on renewable energy for its power needs, and the trend is expected to continue growing in the coming years as traditional energy sources become more expensive and less attractive.

Offsetting Bitcoin’s Energy Consumption

The other option to make Bitcoin greener is carbon offsetting.

Fossil fuels — burning oil or coal to create energy — come with massive carbon emissions. In other words, burning them blows large amounts of CO2 into the atmosphere, which impacts air quality and our climate. They are the main culprit behind the climate change discussion and why the world as a whole is trying to reduce their energy consumption.

In other words, what’s bad about generating and consuming electricity is the carbon it emits and its effects on our planet. The most common methods of going greener include carbon credits and offsets like carbon sequestration (i.e., capturing the carbon through planting trees). Here’s the difference between carbon credits and offsets:

Carbon credit

An allowance given to one company or country for a certain amount of CO2 emissions. Typically, one carbon credit is equivalent to the permission to emit one ton (or metric ton, mt) of CO2

Carbon offset

A measurable and verifiable reduction in the emission of carbon, or an increase in carbon storage (e.g., land restoration, tree planting), which are mainly used to compensate for emissions occurring elsewhere. 

The crypto industry is aware of its poor environmental image, and green crypto projects, including tokenised carbon credits, have been emerging as a result. While there isn’t enough data on how much carbon from Bitcoin mining is offset, more about the options and their positive impact on the environment are found in this report.


Bitcoin’s energy consumption remains a concern, with estimates suggesting it consumes around 87 TWh annually. The energy-intensive nature of Bitcoin mining is due to its complex Proof of Work (PoW) process, requiring substantial computational power. While some cryptocurrencies have transitioned to greener consensus mechanisms, it’s unlikely that Bitcoin will change its fundamental PoW system. 

To mitigate its carbon footprint, Bitcoin relies on renewable energy sources, with almost 50% of mining already using renewables, and carbon offsetting methods, such as carbon credits and carbon sequestration. These efforts aim to address Bitcoin’s environmental impact and contribute to a more sustainable future.

Due Diligence and Do Your Own Research

All examples listed in this article are for informational purposes only. You should not construe any such information or other material as legal, tax, investment, financial, cybersecurity, or other advice. Nothing contained herein shall constitute a solicitation, recommendation, endorsement, or offer by to invest, buy, or sell any coins, tokens, or other crypto assets. Returns on the buying and selling of crypto assets may be subject to tax, including capital gains tax, in your jurisdiction. Any descriptions of products or features are merely for illustrative purposes and do not constitute an endorsement, invitation, or solicitation.

Past performance is not a guarantee or predictor of future performance. The value of crypto assets can increase or decrease, and you could lose all or a substantial amount of your purchase price. When assessing a crypto asset, it’s essential for you to do your research and due diligence to make the best possible judgement, as any purchases shall be your sole responsibility.

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Frequently Asked Questions

Cryptocurrency is a digital or virtual currency that operates on distributed ledger technology called a blockchain and uses cryptography for security. It is decentralized and operates independently of a central bank.
Unlike traditional currencies, cryptocurrencies are not backed by a physical commodity or government, and their value is determined by market demand and supply. Cryptocurrencies can be used to buy goods and services, transfer funds, and trade in markets. Popular cryptocurrencies include Bitcoin, Ethereum, Litecoin, Ripple, and Cronos.
Many cryptocurrencies, like Bitcoin, are created through a process called mining, which involves solving complex mathematical equations to validate and record transactions on a blockchain. This mechanism is also called Proof of Work (PoW). Another consensus mechanism that has increased in popularity — as it is more energy efficient — is Proof of Stake (PoS). Instead of mining, PoS relies on network participants validating transactions. Ethereum, the second-largest cryptocurrency, uses this consensus mechanism.
Bitcoin is a cryptocurrency that operates on a peer-to-peer (P2P) network. It was created in 2009 by an unknown person or group using the pseudonym Satoshi Nakamoto. Bitcoin is the first and most well-known cryptocurrency, and it has gained significant popularity and value since its creation.
Unlike traditional fiat currency, which is controlled by central banks and governments, Bitcoin operates independently of any central authority. Transactions are verified and recorded on the blockchain, which is a distributed ledger that maintains a permanent and transparent record of all transactions.
Bitcoin can be bought, sold, and exchanged on various cryptocurrency exchanges, and it can be used to purchase goods and services from merchants that accept Bitcoin as a form of payment. The supply of bitcoins is limited to 21 million units, and new bitcoins are created through mining, which involves using specialized computer hardware to solve complex mathematical equations.
Bitcoin is known for its high volatility, and its value can fluctuate rapidly in response to market conditions, news events, and other factors. Many traders, including institutional investors, see Bitcoin as a store of value and a way to participate in the growing cryptocurrency ecosystem.
There are several ways to buy cryptocurrencies, including:
  1. Brokerage services: Crypto brokers allow users to simply buy and sell cryptocurrencies. A popular example is the App, trusted by over 80 million users. It is available at the Apple Store and on Google Play.
  2. Cryptocurrency exchanges: These are online platforms where users can buy, sell, and trade cryptocurrencies using fiat currency or other cryptocurrencies. They offer more complex functions compared to a crypto brokerage, adding trading instruments like crypto derivatives. The Exchange is an example of a popular crypto exchange.
  3. Peer-to-peer (P2P) marketplaces: These are platforms where buyers and sellers can directly trade cryptocurrencies without the involvement of a third-party exchange. This is also known as DeFi, short for decentralized finance. Multiple P2P crypto marketplaces can be accessed all in one app via the DeFi Wallet.
It is important to perform proper research and choose a reputable platform to buy cryptocurrencies. For instance, holds the highest security rating in the industry. In addition, it is advisable to store cryptocurrencies securely in a wallet like the App or DeFi Wallet.
To buy crypto, follow these general steps:
  1. Choose a crypto platform to use, like the Exchange or App.
  2. Create an account on the chosen platform by providing personal information and ID verification, also known as ‘Know Your Customer’ (KYC) procedures.
  3. Deposit fiat currency or another cryptocurrency into the newly created account. The App supports bank transfers, credit cards, debit cards, and cryptocurrency transfers to buy crypto, depending on region.
  4. Navigate to the ‘Buy’ section of the Exchange or App and select the crypto to buy.
  5. Enter the amount of cryptocurrency to buy and confirm the transaction.
  6. The crypto will be deposited into the account. From here, it can be transferred to other crypto wallets or converted back to fiat currency and paid out to a bank account.
It is important to perform proper research and choose a reputable platform to buy cryptocurrencies. For instance, holds the highest security rating in the industry. In addition, it is advisable to store cryptocurrencies securely in a wallet like the App or DeFi Wallet.
Users can buy Bitcoin from a cryptocurrency exchange, a crypto brokerage service like the App, or a peer-to-peer (P2P) marketplace like those found in the DeFi Wallet. Here are some general steps to buying bitcoin from an exchange or brokerage service:
  1. Choose a reputable cryptocurrency platform that supports Bitcoin trading. Popular options include the App and the Exchange.
  2. Create an account on the chosen platform and complete the KYC verification process, which may require providing personal identification documents.
  3. Fund an account using a bank transfer, credit/debit card, or other cryptocurrency, depending on region.
  4. Navigate to the ‘Buy’ section of the platform and select Bitcoin as the cryptocurrency to buy.
  5. Enter the amount of bitcoin to buy, or the amount of fiat or cryptocurrency to spend.
  6. Review the transaction details and confirm the purchase.
  7. Once the transaction is complete, the bitcoin will be deposited into the chosen account. From here, the funds can be transferred to other crypto wallets or converted back to fiat currency and paid out to a bank account.
It is important to perform proper research and choose a reputable platform to buy cryptocurrencies. For instance, holds the highest security rating in the industry. In addition, it is advisable to store cryptocurrencies securely in a wallet like the App or DeFi Wallet.
To trade cryptocurrency, follow these general steps:
  1. Choose a cryptocurrency exchange that supports trading. A popular option is the Exchange.
  2. Create an account on the chosen platform and perform ID verification, known as KYC (‘Know Your Customer’).
  3. Deposit funds into the newly created account using a supported payment method. The Exchange supports bank transfers and credit/debit cards.
  4. Navigate to the trading section of the platform and select the cryptocurrency pair to trade.
  5. Choose whether to buy or sell the cryptocurrency, and enter the amount to trade.
  6. Set the preferred price and order type. There are several types of orders, including market orders, limit orders, stop orders, and crypto options, which allow users to buy or sell at a specific price or under certain conditions.
  7. Submit the trade order and wait for it to be executed. Depending on market conditions, the trade may be filled immediately, or it may take time to be filled.
  8. Monitor trades and adjust strategies as necessary.
Here is an introduction to trading on the Exchange.
It is crucial to note that trading cryptocurrency carries risk, and it is important to trade only what you can afford to lose.
There are several ways to earn cryptocurrency, including:
  1. Mining: Cryptocurrency mining involves using specialized computer hardware to solve complex mathematical equations that validate transactions on a blockchain network. Successful miners are rewarded with newly minted cryptocurrency for their efforts.
  2. Staking/Lockups: Staking and lockups involve holding or locking up a certain amount of cryptocurrency in a wallet or on a platform to support the operations of the blockchain network. Stakers are rewarded with new cryptocurrency as a form of interest for their support.
  3. Trading: Trading cryptocurrency involves buying and selling cryptocurrencies on exchanges or other trading platforms. Those who have a good understanding of market trends and are able to make informed trading decisions can earn profits through trading.
  4. Airdrops: Airdrops are free distributions of cryptocurrency to users who meet certain criteria or participate in promotional activities.
  5. Crypto Projects: Some blockchain projects offer rewards or bounties for users who contribute to their development or community. This can include activities like bug bounties, testing, or content creation.
It's important to note that each method of earning cryptocurrency carries its own risks and rewards. It is recommended to carefully research cryptocurrencies and understand the process before buying. Learn more about the crypto market at University.

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