Bitcoin price and energy use for mining highly correlated: UN report

    2023.10.30 | exchangesranking | 799onlookers

    A recent study conducted by the United Nations suggests a direct correlation between the price of Bitcoin (BTC) and the energy needed for mining operations.

    UN scientists evaluated the activities of 76 Bitcoin mining nations during the 2020–2021 period and found that the global Bitcoin mining network consumed 173.42 terawatt-hours of electricity. During this timeframe, the crypto ecosystem was undergoing a bull run, and Bitcoin rallied to mark its all-time high of $69,000. The UN report highlighted:

    “A 400% increase in Bitcoin’s price from 2021 to 2022 triggered a 140% increase in the energy consumption of the worldwide Bitcoin mining network.”

    At the time, fossil energy sources accounted for 67% of the electricity generated for Bitcoin mining. However, crypto entrepreneurs have taken proactive measures to increase their dependence on green energy.

    Hydropower satisfied over 16% of the total electricity demand of the global Bitcoin mining network; nuclear, solar and wind energy sources provided 9%, 2% and 5%, respectively.

    According to the UN report, the top 10 Bitcoin mining nations at the time — China, United States, Kazakhstan, Russia, Malaysia, Canada, Germany, Iran, Ireland and Singapore — were responsible for 92%–94% of the global carbon, water and land footprint of Bitcoin.

    The global push for greener alternatives to fulfill the grid demand will also help reduce the carbon footprint of Bitcoin and the crypto ecosystem.

    Related: Bitcoin mining is becoming more environmentally friendly

    Recently, Genesis Digital Assets Limited, a mining and data center company with over 400 megawatts (MW) of power generation worldwide, opened a new data center in Sweden running 1,900 Bitcoin mining machines, driven by the country’s burgeoning renewable energy surplus.

    Christian Anders, founder of BT.CX, told Cointelegraph that Bitcoin mining is not very common due to high energy prices. However, he added:

    “Sweden, Finland and Norway have a surplus of energy and negative energy prices from time to time, and primarily renewable energy in the form of hydropower in a remote location which is hard to distribute.”

    In parallel, Bitcoin mining equipment manufacturers continue to deliver energy-efficient hardware. At the World Digital Mining Summit on Sept. 22, Bitcoin miners shared their plans to help decarbonize the crypto ecosystem.

    Bitmain rolled out its efficiency-focused Antminer S21, while Nazar Khan, chief operating officer of TerraWulf, highlighted that the role Bitcoin rig manufacturers play “is locating our Bitcoin mining loads in places where that’s happening and how do we facilitate that decarbonization process.”

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