Renewable Energy, The (Only) Way Forward for Cryptocurrency Mining

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3Q 2021 | IN-6206


Energy Intensive Nature of Bitcoin


Recently, Tesla’s CEO Elon Musk announced that the company would suspend vehicle purchases using Bitcoin and will only resume once mining operations shift towards more sustainable energy sources. This has raised concerns over the rising energy usage of blockchains and cryptocurrency mining. Bitcoin and Ethereum, the two largest blockchains by market capitalization, rely on the proof of work (PoW) concept whereby miners compete to solve complex mathematical problems using graphics processing units (GPUs) or application-specific integrated circuits (ASICs). This process consumes substantial amounts of electricity. A rig with three GPUs can consume 1,000 watts of power or more when it's running, the equivalent of having a medium-size window AC unit turned on. Crypto mining businesses can have hundreds or even thousands of rigs in one location. Cambridge’s Center for Alternative Finance estimates the currently annualized electricity consumption of the Bitcoin network amounts to 145 TWh, which accounts for about 0.65% of total global electricity consumption. Other estimate…

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