Bitcoin mining has been at the center of many environmental and energy consumption debates lately with many speculating that the activity is consuming enormous amounts of energy and could impact the environment in a negative way.
However, a new Credit Suisse report has put an end to this debate to a certain extent by suggesting that bitcoin mining activity isn’t an environmental armageddon.
Bitcoin mining activity has a lot of profitability involved, but as more and more miners have joined the bandwagon, the increased mining difficulty calls for more calculations that in turn calls for more hashpower and this effectively increases electricity consumption as more and more equipment have to be installed and infrastructure setup.
This increase in infrastructure and installation of specialized hardware has caused jitters among environmental activists who believe that bitcoin could cause a global energy crisis.
In a new report last week Morgan Stanley put forward a prediction that cryptocurrency miners could consume as much as 140 terawatt-hours of electricity this year, which equates to about 0.6 percent of global demand. Citing this report, Credit Suisse said that bitcoin mining is unlikely to cause an “environmental Armageddon” — at least anytime soon.
They added that it is a mistake to project miners’ power consumption lineally, as the industry will likely develop hardware and practices that are more energy-efficient in a bid to gain a competitive advantage. The report noted that this phenomenon occurred among both marijuana growers and data center operators during high-growth periods for these industries.
The report predicts bitcoin mining is “very unlikely” to approach 350 terawatt-hours of energy consumption a year, a mark that qualifies an industry as an “ultra-high-end” electricity consumer. Rather, the analysts anticipate that the mining industry could present electricity producers with a $5 billion “global annual revenue opportunity,” which is a far cry from the $6 trillion worth of energy consumed globally each year.