Energy is defined as the ability to do a job, such as hashish (mining). If you use a 3000 watt Antminer T17+ for one hour, you've used 3000 watt-hours, or 3.0 kWh. In other words, 3.0 kWh is the amount of energy you need to run a T17+ for one hour. Cryptocurrencies have an energy consumption problem that is becoming increasingly difficult to ignore. Bitcoin alone is estimated to consume 127 terawatt-hours (TWh) per year, which is more than many countries, including Norway.
In the United States, cryptocurrency activity is estimated to emit between 25 and 50 million tons of CO2 each year, on par with the annual emissions of diesel fuel used by US railroads. Until recently, around 75% of all Bitcoin mining was done in China, providing access to cheap electricity and hardware. When trading bitcoins, computers around the world rush to complete a calculation that creates a 64-bit hexadecimal number, or hash, for that bitcoin. This process requires an immense amount of energy. Elon Musk recently announced that Tesla would no longer accept Bitcoin as payment due to its high energy consumption. Since then, Musk has taken a new direction: in May, he delivered Tesla Megapack batteries to a Texas bitcoin mining facility.
Some Bitcoin miners may not have direct control over their electricity consumption if their mining computers are outsourced to larger data centers. Digiconomist's Bitcoin Energy Consumption Index estimates that it takes 1,449 kWh to complete a bitcoin transaction, or the equivalent of approximately 50 days of energy for an average American home. Greenidge Generation, a bitcoin mining plant powered by natural gas in the picturesque Finger Lakes region of upstate New York, is a controversial example of this trend. Another common question is how much does a monthly kilowatt cost per mining rig? To calculate it, you simply get the cost per kW of the data center or mining farm. The most reliable and neutral bitcoin electricity index from the University of Cambridge states in its frequently asked questions that the “energy per transaction” metric is very misleading, since a single Bitcoin transaction can group thousands (even millions) of L2 transactions, just as FedWire does with bank transactions. Currently, most bitcoin mining takes place in the United States, where 35% of Bitcoin's hashrate is currently located, that is, the total computational power used to extract and process transactions. Until a consensus mechanism for the use of bitcoins that consumes less energy is developed and available, current Bitcoin mining operations should run on additional, renewable energy. Today, bitcoin mining is a highly competitive business, with extensive air-conditioned facilities housing tens of thousands of high-tech computers that operate 24 hours a day.
As mining platforms consume more energy, nearby power plants must produce more electricity to compensate, increasing the likelihood that more fossil fuels will be used. Bitcoin mining consumes roughly the same amount of energy as Argentina, according to the Bitcoin Energy Consumption Index, and with that annualized level of 131.26 terawatt-hours, cryptocurrency mining would be among the top 30 countries in terms of energy consumption. For Bitcoin mining to continue sustainably and responsibly, it must run on additional renewable energy so as not to inadvertently increase the required network capacity and generate more fossil fuel generation. As bitcoin mining comes under increasing criticism for its increasing energy consumption, it is possible that the phenomenon is approaching a turning point where cryptocurrencies must be sincere and environmentally friendly in order to prove themselves as true turning points.
Electronic waste from bitcoin mining amounts to 34 kilotons - an amount comparable to that produced by the Netherlands.