After taking a nosedive in June, the price of Bitcoin has stayed so low that it’s forcing the blockchain’s massive electricity use to similarly dip. Over the past couple weeks, Bitcoin’s energy consumption has dropped by more than a third, according to estimates of annualized electricity use by digital currency economist Alex de Vries on his website digiconomist.net.
Bitcoin’s energy hunger, which has alarmed environmentalists and consumer advocates concerned about pollution and utility prices, comes from the process of mining new tokens. Bitcoin miners earn new tokens by validating transactions through an inherently energy-inefficient process, using specialized machines to solve complex puzzles. All that computing by all those machines has led to an energy appetite rivaling that of entire nations.
Bitcoin’s annualized energy consumption has fallen from about 204 terawatt-hours (TWh) per year on June 11th to around 132 TWhper year on June 23rd. But even though its electricity use has plunged, it’s still very high — roughly equivalent to the amount of electricity Argentina uses in a single year.
Just how much energy the Bitcoin network uses is tied to its value. The more valuable it is, the more incentive there is for miners to ramp up operations — perhaps by buying new machines. The price of Bitcoin peaked in November 2021, reaching around $69,000. Since that peak, de Vries estimated that the blockchain’s annual electricity consumption ranged between roughly 180 and 200 TWh. That’s about the same amount of electricity used by all the data centers in the world every year.