Cryptocurrency Mining Now Accounts for Approximately One Percent of the World’s Energy Consumption

Drew Millard, the Outline:

It is well-established established that Bitcoin mining — aka, donating one’s computing power to keep a cryptocurrency network up and running in exchange for a chance to win some free crypto — uses a lot of electricity. Companies involved in large-scale mining operations know that this is a problem, and they’ve tried to employ various solutions for making the process more energy efficient.

But, according to testimony provided by Princeton computer scientist Arvind Narayanan to the Senate Committee on Energy and Natural Resources, no matter what you do to make cryptocurrency mining hardware greener, it’s a drop in the bucket compared to the overall network’s flabbergasting energy consumption. Instead, Narayanan told the committee, the only thing that really determines how much energy Bitcoin uses is its price. “If the price of a cryptocurrency goes up, more energy will be used in mining it; if it goes down, less energy will be used,” he told the committee. “Little else matters. In particular, the increasing energy efficiency of mining hardware has essentially no impact on energy consumption.”

The creation of every single conventional currency does not consume one percent of the world’s power production today. According to the power generation stats provided by the International Energy Agency and figures on the environmental impact of gold mining from Coinbase — which, by the way, includes the worst example of a “life cycle” diagram I’ve seen in a long time — it’s possible that gold mining is a more energy-efficient industry than cryptocurrency creation.

Theophite on Twitter:

Imagine if keeping your car idling 24/7 produced solved Sudokus you could trade for heroin.

What a terrific analogy.