The announcement, which cited an increase in fossil fuel usage, is considered by many to have caused the largest crypto crash since 2013.
At first glance, this question depends more on how you feel about Bitcoin.
One can do this by looking at the Bitcoin hashrate, which is the total combined computational power used by the network.
However, it would be appropriate to benchmark its energy consumption against gold and the traditional banking system – the spaces it is most often compared with.
To put this in perspective, both traditional banking systems and gold mining have been found to consume twice the energy of Bitcoin mining.
Next, we need to keep in mind that there is a difference between how much energy a system consumes and how much carbon it emits.
However, there are plenty of limitations to this data, which still leave us in the dark about Bitcoin’s energy mix.
Consequently, we see a large variance in estimates for the use of renewable energy in Bitcoin mining.
The Bitcoin halving system, an event that occurs roughly every four years where the block reward for mining Bitcoin transactions is cut in half, means that it is economically unviable for a miner to continuously expand their operations.
So, in the long term, Bitcoin’s energy consumption, which is already half of the traditional banking systems, is likely to drop or, at the very least, plateau.
Disclaimer: The views expressed in the article above are those of the authors’ and do not necessarily represent or reflect the views of this publishing house.