Crypto glossary
Bitcoin energy consumption
Bitcoin energy consumption is the electricity used by mining machines securing the network, comparable to that of a mid-sized country and hotly debated.
Proof of work turns electricity into security: miners run machines around the clock, and the cost of that energy is what makes rewriting the chain prohibitively expensive. Total consumption is not measured directly. Researchers, such as the University of Cambridge's electricity consumption index, estimate it from network hashrate and the efficiency of the machines likely in use, producing a range rather than a single figure.
Consumption tends to track miner revenue: when the bitcoin price rises, more machines are switched on until margins tighten again. The resulting figure, comparable to the yearly electricity use of a mid-sized country, has driven criticism from environmental groups and policymakers, and in 2021 played a part in mining restrictions in China and in investor pressure on companies holding bitcoin.
The debate is not only about the amount but the source. Miners argue they increasingly use hydropower, curtailed renewables and flared gas, and can switch off to support grids; critics reply that estimates of renewable share vary widely and that fossil-fuel mining still adds emissions. Energy used per transaction is a misleading metric, since consumption depends on rewards, not on transaction count.
Example
When the bitcoin price doubles in a bull market, older ASICs that were unprofitable become worth running again, and estimated network electricity use rises over the following months.