Bitcoin Energy Consumption Soars by 152% Over the Past 18 Months

As it approaches its supply limits, Bitcoin consumes record amounts of energy. According to Stocklytics.com, Bitcoin’s energy consumption has increased by over 150% in the last 18 months. The surge in energy demands underscores the growing user base in Bitcoin mining and the high costs associated with the transition to digital currency.

The site’s financial analyst, Edith Reads, comments:

The rise in power demand reflects a rebound in bitcoin prices from a low of $16,611 on Jan. 1, 2023, to a top of $69,117 today. There exists a clear correlation between prices and electricity consumption. As the value of the resource goes up, more miners receive higher rewards, leading to increased mining activity and, subsequently, higher energy consumption.

Stocklytics financial analyst, Edith Reads

Bitcoin Mining Power Drain

Bitcoin mining contributes to the already substantial industrial energy demands, with its consumption estimated to surpass Finland’s. In 2023, the energy used in a single BTC transaction equalled that of hundreds of thousands of Visa card transactions. Projections indicate global Bitcoin mining will increase by over a third in 2024, suggesting further intensified power usage and demand.

By mid-2021, miners had already mined roughly 90% of BTC, leaving less than 3 million in circulation. While the supply limit is running thin, projections indicate that the last Bitcoin will be mined in 2140, signalling a massive capacity for growth and profitability within the Bitcoin industry. However, as the supply of coins dwindles, their demand increases, necessitating more computational power and resulting in an astounding energy requirement.

In Bitcoin’s early days, its mining didn’t consume nation-state amounts of electricity. However, inherent to the cryptocurrency’s technology is that math puzzles become much harder as more people compete to solve them, and this dynamic will only accelerate as more people attempt to buy into Bitcoin.

Several miners are using electricity in competition for rewards. Although hundreds of thousands of computers may be racing to solve the same problem, only one can ultimately receive the Bitcoin honorarium.

The Impact of High BTC Mining Power Demands

According to conservative estimates from consulting firm Wood Mackenzie, BTC mining has raised electricity costs for non-mining Texans by $1.8 billion annually, or 4.7%, in Texas. The ERCOT Market Outlook also predicted that energy prices could surge by almost 30%, hinting at higher costs to be borne by non-mining civilians.

The substantial power demands are straining electricity grids and highlighting the potential exacerbation of climate change. With coal and fossil fuels dominating electricity production, the EIA closely monitors electricity usage and demand, suggesting potential future scrutiny of BTC mining operations.