Bitcoin Energy Consumption Hit New Record in 2023

A recent analysis found that Bitcoin “mining” energy consumption posted a new annual record for 2023, surpassing its previous record set in 2022. Bitcoin computations consumed upwards of 120TWh of electricity in 2023, according to Cambridge University analysts.

The findings come on the back of a report published by the Energy Information Administration, an agency of the US Department of Energy. After a Senate request to document the impact of the “mining” industry, the agency reported that an estimated 2% of the country’s power consumption is used on the activity.

The US became the world centre of Bitcoin “mining” from 2022. Texas alone has processed requests for 41GW of new capacity to be used by Bitcoin miners. (Australia’s total electricity output is around 31GW.) 

The shift to the US came after China decided the industry was too harmful in its facilitation of money laundering, corruption and capital flight. Now, a US administration with its eye to net zero and refashioning the electricity grid has its eye on Bitcoin for a different reason. 

The quantity of energy used for Bitcoin is obviously huge. Some 2.9 billion trees would need to be planted to offset its 2023 emission.
But it isn’t just the quantity but also the intensity. Bitcoin miners have set up operations in old aluminium smelters in the US northeast to take advantage of existing high-capacity grid connections, but that isn’t always possible.

Inside a nuclear-powered Bitcoin “mine”.

For this reason, Bitcoin production can also destabilise electricity grids, making them less reliable. This has become more problematic as net zero forces a transition to less centralised energy production.

What’s truly absurd about the Bitcoin boom is that these levels of energy consumption aren’t even inherent to cryptocurrency. Ethereum, for example, uses approximately 0.005% as much energy as Bitcoin to produce.

But with the price of one Bitcoin currently over US $40,000, the bubble has of course taken on its own momentum.

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