The use of energy is a very controversial and also very poorly understood function in the Bitcoin monetary system. This is why from the start of this article it is important to specify that the comments made below will be based on an indirect emissions model , a model which takes into account the environment and the energies used .
Satoshi Nakamoto said the following sentence to clarify this point:
“ The utility of the exchanges made possible by Bitcoin will far exceed the cost of the electricity used. Therefore, not having Bitcoin would be a net waste .”
We will now try to understand the meaning of this sentence.
Network efficiency
It is first of all essential to calculate the efficiency of the network in order to be able to accurately estimate the estimate of the total electricity consumption of the network . To do this, it is a question of modeling the total sum of all the functional ASIC (integrated circuits) hardware units which contribute to the hashrate . Once the total number of mining units has been determined, simply calculate the average efficiency factor of the network with the relationship: average number of Watts drawn by the network/Hashrate rate.
Let's start at the beginning by first defining the location of miners on our globe by putting into perspective the total electricity consumption of the countries in question. This consumption can thus be converted into hash rate and give meaning to the efficiency of the network.
We now need to list all the hardware units used in our total hashrate, here is the result:
This being done, we are progressing little by little and we now need to determine the total hasrate per hardware unit . Just say it to get it done, here are the results:
We now have our hashrate, we just need to determine the consumption of our network by calculating the total electricity consumption of our hardware units, and here are the results:
With all this data, we are finally ready to calculate the efficiency of the network which is none other than the relationship between the hash rate and the electricity consumption of the network, remember. Here is a very nice curve which reflects the average efficiency of the network:
It is therefore from this result halfway through the reasoning that we start again for a new series of measurements. From these average efficiency factors and the hash rate, it is now easy to make an estimate of the consumption of the Bitcoin network. The latter will therefore have consumed 75 TWH of electricity in 2020 and 82 TWH in 2021 , which represents approximately 0.05% of the total energy consumed in the world when we take the highest estimate of 2019 with 89 TWH of expenditure over one year:
Calculation of carbon emissions
It is then sufficient to distribute the total electricity consumption of the network to the different mining regions in the world , depending on the carbon intensity and the energy production sources of the region in question. Here is a first graph putting the electricity consumption of the network into perspective through a breakdown of the different mining countries:
It is also interesting to note that the hash rate and energy consumption are geographically fairly well distributed :
We will now put these latest data into perspective with the estimated emissions from the Bitcoin network , even if this must be put into perspective by the new use of “ torches ” (short circle recycling of lost energy). It is therefore estimated that the Bitcoin mining network emitted 36 MT of CO2 in 2021 and 41 MT in 2021 , to give you an idea, this represents 0.08% of global emissions .
It is then a question of calculating the carbon intensity of the different mining countries in the world, it is the average mix of sources of electricity production on an annual basis in the region in question. Here is the carbon intensity of the different Bitcoin hosts:
We must now correlate this data with our previous results on the electricity consumption of the different countries hosting Bitcoin farms to obtain the carbon intensity of the total electricity consumption of the Bitcoin network :
These data are certainly interesting but we need more granularity , which is why we will now divide the CO2 emissions to the different mining regions in order to take into account regional differences :
Finally, to complete this analysis and return to our initial postulate which consisted of carrying out a study of the indirect emissions of Bitcoin, we must now study the mix of electricity production from the network . This energy mix is in full diversification and will allow Bitcoin to be completely energy neutral in the future:
Indeed, when we remove renewable energies from this graph , we obtain the total emissions from the network in the strict sense :
Conclusion
To conclude on these results, we can consider several things. First of all, it is necessary to understand that these results will improve , thanks to the improvement in the performance of the ASIC which will in this way allow better efficiency of the network; but also with reduced carbon intensity in countries that will have to develop.
It is now sufficient to calculate the efficiency of energy use on a network scale or more precisely, all the energy expenditures which are not linked to hashing but which are still incurred by the operations of the data centers. data (cooling for example). This rate is commonly defined as 10% additional energy expenditure in addition to hashing.
It is, therefore less than 0.01% of global emissions that find their source in Bitcoin. Currently, the majority of energy is used to mint new coins but by 2040 over 99% of Bitcoins will have been minted. So in the next 100 years, the only cost of Bitcoin will be its consumption useful for settling transactions. In this way, if we also want to show bad faith, when our electricity production will be 100% renewable, then Bitcoin will also be…
We will therefore end this demonstration with this magnificent sentence:
“ The emissions, removing the entire mining network from global demand – and thus depriving hundreds of millions of people of their only hope of a fair and accessible form of currency – would be nothing more than a mistake of rounded
