Bitcoin has an energy issue. It takes a lot of energy to mine. So much so, that one journalist recently likened mining to Big Oil when looking at future environmental consequences. Miners argue that much of this power is generated by renewable energy, such as hydroelectric power, and because of this, concerns about its energy consumption are overblown. But a recent report titled “Renewable Energy Will Not Solve Bitcoin’s Sustainability Problem”, by Alex de Vries of PwC, takes this idea to task, making the case that the energy costs not only aren’t offset by renewable energy, but there are also other environmental costs we don’t fully appreciate yet.
The report identifies a couple of key issues when it comes to how we think about measuring mining’s energy consumption. The first is that we don’t account for all the connected and related energy costs of bitcoin, such as bitcoin ATMs, as well as third parties like exchanges, wallets, and payment solution providers. Even comparing the standard energy cost of an electronic transaction by a bank versus a bitcoin transaction, standard banking techniques consume far less energy than bitcoin. The electricity footprint per bitcoin transaction can range from 491.4 kilowatts per hour (kWh) to 765.4 kWh.