Bitcoin price and energy use for mining highly correlated: UN report
Update: This article has been updated to highlight that the UN report referenced the Mora et al. 2018 paper, which overestimated the emissions of mining operations by including unprofitable mining rigs in their analysis.
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.
However, members of the crypto community called out the UN report for referencing the Mora et al. 2018 paper, which had overestimated the carbon emission levels of Bitcoin mining rigs by including unprofitable mining rigs in their analysis.
One of the crazy things about the UN paper is that the authors did read the rebuttals to the Mora et al paper because they cite the Houy 2019 paper, but only to note that BTC price is a factor in determining BTC mining profitability. The UN authors completely ignored the opening…
— Margot Paez / jyn urso (@jyn_urso) October 25, 2023
Nic Carter criticized the UN report for citing „completely fake academia in their papers (mora et al 2018)“.
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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