Bitcoin has been in the limelight for years, but in the last few months it has been rapidly increasing in value. A year ago, Bitcoin was worth less than a thousand dollars per coin but climbed to over $5000 per coin by mid-October. Today the price for a single Bitcoin is hovering just below $12,000.
But the price of Bitcoin isn’t the only thing skyrocketing. So is the cost of Bitcoin’s electricity bill. Every Bitcoin transaction requires an immense amount of computing power to pull off, and those calculations aren’t free. According to an analysis by Digiconomist, the amount of electricity consumed to run Bitcoin mining operations is only slightly less than the amount of electricity required to power the country of Denmark.
As Bitcoin becomes harder to mine (a product of its design), the amount of electricity used will only increase. If past trends continue, by 2019 Bitcoin will require as much electricity as the entire United States. This won’t necessarily happen. As Ars Technica points out, the energy cost could level off or even drop if the price of Bitcoin tanks. Either way, the currently large amount of electricity devoted to the cryptocurrency has to come from somewhere. Chances are, for the foreseeable future, Bitcoin mining rigs will be powered by electricity from fossil fuels.
It doesn’t have to be this way. Countries could choose to build renewable energy generators instead of fossil fuel plants, and there’s a chance future technology might allow for Bitcoin transactions to be completed with much less energy. But it’s possible most countries will expand their power generation with new natural gas plants and Bitcoin may remain as energy-intensive as ever, as will everything else.
Even with a strong commitment to renewable energy, energy grids still require baseline power produced by fossil fuels. Simply put, a larger power requirement always means more fossil fuels, no matter how many wind farms or solar panels a country or utility wants to build. And in a few years, Bitcoin and other cryptocurrencies may be the source of a significant percentage of the world’s energy needs.
How much extra carbon dioxide will be released into the atmosphere because of Bitcoin? An exact answer is impossible to calculate ahead of time, but it’s certain to be a lot. The question is whether or not a decentralized currency will wind up having been worth it.