Whether or not one believes bitcoin is the decentralized future of money or a pyramid scheme masquerading as currency, the reality is that mining bitcoins consumes enormous amounts of energy.
According to U.K. think tank Power Compare, the combined energy usage of bitcoin miners outpaces that of 159 countries. Bitcoin miners’ energy consumption increased by almost 30% in the past month alone. At that pace, the energy required to mine new bitcoins will consume all of the world’s electricity production by 2020, according to Power Compare.
Because of bitcoin’s astronomical price appreciation over the last year, miners have engaged in an arms race to create larger and more powerful computational rigs that can mine more bitcoins. And since it takes a huge and skyrocketing amount of computing power to run a bitcoin mine, the energy requirements are getting higher and higher. Some estimates peg the energy needed for a single transaction as the equivalent to that of one-and-a-half U.S. homes per day.
Some bitcoin mines have begun powering their operations with renewable generation. HydroMiner, for instance, is a cryptocurrency mining operation in Europe that meets its demand using hydro projects in the Alps. The company touts its cost of power as 85% less than the rest of Europe. Meanwhile, mines in Iceland have harnessed the island’s geothermal energy to keep the bitcoins flowing.
Which prompted us to wonder whether, in the age of socially responsible investing, a “green” bitcoin ought to be worth more than a “brown” one. On reflection, however, the distinction might not matter if the whole scheme is the house of cards Jamie Dimon believes it to be.