Visualizing the Power Consumption of Bitcoin Mining
Cryptocurrencies have been some of the most talked-about assets in recent months, with bitcoin and ether prices reaching record highs. These gains were driven by a flurry of announcements, including increased adoption by businesses and institutions.
Lesser known, however, is just how much electricity is required to power the Bitcoin network. To put this into perspective, we’ve used data from the University of Cambridge’s Bitcoin Electricity Consumption Index (CBECI) to compare Bitcoin’s power consumption with a variety of countries and companies.
Why Does Bitcoin Mining Require So Much Power?
When people mine bitcoins, what they’re really doing is updating the ledger of Bitcoin transactions, also known as the blockchain. This requires them to solve numerical puzzles which have a 64-digit hexadecimal solution known as a hash.
Miners may be rewarded with bitcoins, but only if they arrive at the solution before others. It is for this reason that Bitcoin mining facilities—warehouses filled with computers—have been popping up around the world.
These facilities enable miners to scale up their hashrate, also known as the number of hashes produced each second. A higher hashrate requires greater amounts of electricity, and in some cases can even overload local infrastructure.
Putting Bitcoin’s Power Consumption Into Perspective
On March 18, 2021, the annual power consumption of the Bitcoin network was estimated to be 129 terawatt-hours (TWh). Here’s how this number compares to a selection of countries, companies, and more.
|Name||Population||Annual Electricity Consumption (TWh)|
|All of the world’s data centers||-||205|
|State of New York||19.3M||161|
|Walt Disney World Resort (Florida)||-||1|
Note: A terawatt hour (TWh) is a measure of electricity that represents 1 trillion watts sustained for one hour.
Source: Cambridge Centre for Alternative Finance, Science Mag, New York ISO, Forbes, Facebook, Reedy Creek Improvement District, Worldometer
If Bitcoin were a country, it would rank 29th out of a theoretical 196, narrowly exceeding Norway’s consumption of 124 TWh. When compared to larger countries like the U.S. (3,989 TWh) and China (6,543 TWh), the cryptocurrency’s energy consumption is relatively light.
For further comparison, the Bitcoin network consumes 1,708% more electricity than Google, but 39% less than all of the world’s data centers—together, these represent over 2 trillion gigabytes of storage.
Where Does This Energy Come From?
In a 2020 report by the University of Cambridge, researchers found that 76% of cryptominers rely on some degree of renewable energy to power their operations. There’s still room for improvement, though, as renewables account for just 39% of cryptomining’s total energy consumption.
Here’s how the share of cryptominers that use each energy type vary across four global regions.
|Energy Source||Asia-Pacific||Europe||Latin America|
and the Caribbean
Source: University of Cambridge
Editor’s note: Numbers in each column are not meant to add to 100%
Hydroelectric energy is the most common source globally, and it gets used by at least 60% of cryptominers across all four regions. Other types of clean energy such as wind and solar appear to be less popular.
Coal energy plays a significant role in the Asia-Pacific region, and was the only source to match hydroelectricity in terms of usage. This can be largely attributed to China, which is currently the world’s largest consumer of coal.
Researchers from the University of Cambridge noted that they weren’t surprised by these findings, as the Chinese government’s strategy to ensure energy self-sufficiency has led to an oversupply of both hydroelectric and coal power plants.
Towards a Greener Crypto Future
As cryptocurrencies move further into the mainstream, it’s likely that governments and other regulators will turn their attention to the industry’s carbon footprint. This isn’t necessarily a bad thing, however.
Mike Colyer, CEO of Foundry, a blockchain financing provider, believes that cryptomining can support the global transition to renewable energy. More specifically, he believes that clustering cryptomining facilities near renewable energy projects can mitigate a common issue: an oversupply of electricity.
“It allows for a faster payback on solar projects or wind projects… because they would [otherwise] produce too much energy for the grid in that area”
– Mike Colyer, CEO, Foundry
This type of thinking appears to be taking hold in China as well. In April 2020, Ya’an, a city located in China’s Sichuan province, issued a public guidance encouraging blockchain firms to take advantage of its excess hydroelectricity.
Mapped: Solar Power by Country in 2021
In 2020, solar power saw its largest-ever annual capacity expansion at 127 gigawatts. Here’s a snapshot of solar power capacity by country.
Mapped: Solar Power by Country in 2021
The world is adopting renewable energy at an unprecedented pace, and solar power is the energy source leading the way.
Despite a 4.5% fall in global energy demand in 2020, renewable energy technologies showed promising progress. While the growth in renewables was strong across the board, solar power led from the front with 127 gigawatts installed in 2020, its largest-ever annual capacity expansion.
The above infographic uses data from the International Renewable Energy Agency (IRENA) to map solar power capacity by country in 2021. This includes both solar photovoltaic (PV) and concentrated solar power capacity.
The Solar Power Leaderboard
From the Americas to Oceania, countries in virtually every continent (except Antarctica) added more solar to their mix last year. Here’s a snapshot of solar power capacity by country at the beginning of 2021:
|Country||Installed capacity, megawatts||Watts* per capita||% of world total|
|South Korea 🇰🇷||14,575||217||2.0%|
|United Kingdom 🇬🇧||13,563||200||1.9%|
|South Africa 🇿🇦||5,990||44||0.8%|
|United Arab Emirates 🇦🇪||2,539||185||0.4%|
|Czech Republic 🇨🇿||2,073||194||0.3%|
|El Salvador 🇸🇻||429||66||0.1%|
|Saudi Arabia 🇸🇦||409||12||0.1%|
|Dominican Republic 🇩🇴||370||34||0.1%|
|New Zealand 🇳🇿||142||29||0.02%|
|World total 🌎||713,970||83||100.0%|
*1 megawatt = 1,000,000 watts.
China is the undisputed leader in solar installations, with over 35% of global capacity. What’s more, the country is showing no signs of slowing down. It has the world’s largest wind and solar project in the pipeline, which could add another 400,000MW to its clean energy capacity.
Following China from afar is the U.S., which recently surpassed 100,000MW of solar power capacity after installing another 50,000MW in the first three months of 2021. Annual solar growth in the U.S. has averaged an impressive 42% over the last decade. Policies like the solar investment tax credit, which offers a 26% tax credit on residential and commercial solar systems, have helped propel the industry forward.
Although Australia hosts a fraction of China’s solar capacity, it tops the per capita rankings due to its relatively low population of 26 million people. The Australian continent receives the highest amount of solar radiation of any continent, and over 30% of Australian households now have rooftop solar PV systems.
China: The Solar Champion
In 2020, President Xi Jinping stated that China aims to be carbon neutral by 2060, and the country is taking steps to get there.
China is a leader in the solar industry, and it seems to have cracked the code for the entire solar supply chain. In 2019, Chinese firms produced 66% of the world’s polysilicon, the initial building block of silicon-based photovoltaic (PV) panels. Furthermore, more than three-quarters of solar cells came from China, along with 72% of the world’s PV panels.
With that said, it’s no surprise that 5 of the world’s 10 largest solar parks are in China, and it will likely continue to build more as it transitions to carbon neutrality.
What’s Driving the Rush for Solar Power?
The energy transition is a major factor in the rise of renewables, but solar’s growth is partly due to how cheap it has become over time. Solar energy costs have fallen exponentially over the last decade, and it’s now the cheapest source of new energy generation.
Since 2010, the cost of solar power has seen a 85% decrease, down from $0.28 to $0.04 per kWh. According to MIT researchers, economies of scale have been the single-largest factor in continuing the cost decline for the last decade. In other words, as the world installed and made more solar panels, production became cheaper and more efficient.
This year, solar costs are rising due to supply chain issues, but the rise is likely to be temporary as bottlenecks resolve.
Visualizing the Race for EV Dominance
Tesla was the first automaker to hit a $1 trillion market cap, but other electric car companies have plans to unseat the dominant EV maker.
Electric Car Companies: Eating Tesla’s Dust
Tesla has reigned supreme among electric car companies, ever since it first released the Roadster back in 2008.
The California-based company headed by Elon Musk ended 2020 with 23% of the EV market and recently became the first automaker to hit a $1 trillion market capitalization. However, competitors like Volkswagen hope to accelerate their own EV efforts to unseat Musk’s company as the dominant manufacturer.
This graphic based on data from EV Volumes compares Tesla and other top carmakers’ positions today—from an all-electric perspective—and gives market share projections for 2025.
Auto Majors Playing Catch-up
According to Wood Mackenzie, Volkswagen will become the largest manufacturer of EVs before 2030. In order to achieve this, the world’s second-biggest carmaker is in talks with suppliers to secure direct access to the raw materials for batteries.
It also plans to build six battery factories in Europe by 2030 and to invest globally in charging stations. Still, according to EV Volumes projections, by 2025 the German company is forecasted to have only 12% of the market versus Tesla’s 21%.
|Company||Sales 2020||Sales 2025 (projections)||Market cap (Oct '21, USD)|
|SGMW (GM, Wulling Motors, SAIC)||211,000||1,100,000||$89B|
Other auto giants are following the same track towards EV adoption.
GM, the largest U.S. automaker, wants to stop selling fuel-burning cars by 2035. The company is making a big push into pure electric vehicles, with more than 30 new models expected by 2025.
Meanwhile, Ford expects 40% of its vehicles sold to be electric by the year 2030. The American carmaker has laid out plans to invest tens of billions of dollars in electric and autonomous vehicle efforts in the coming years.
Tesla’s Brand: A Secret Weapon
When it comes to electric car company brand awareness in the marketplace, Tesla still surpasses all others. In fact, more than one-fourth of shoppers who are considering an EV said Tesla is their top choice.
“They’ve done a wonderful job at presenting themselves as the innovative leader of electric vehicles and therefore, this is translating high awareness among consumers…”
—Rachelle Petusky, Research at Cox Automotive Mobility Group
Tesla recently surpassed Audi as the fourth-largest luxury car brand in the United States in 2020. It is now just behind BMW, Lexus, and Mercedes-Benz.
The Dominance of Electric Car Companies by 2040
BloombergNEF expects annual passenger EV sales to reach 13 million in 2025, 28 million in 2030, and 48 million by 2040, outselling gasoline and diesel models (42 million).
As the EV market continues to grow globally, competitors hope to take a run at Tesla’s lead—or at least stay in the race.
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