A recent study by Arcane Research revealed that global Bitcoin mining operations consumed less energy than the whole video game industry. Data showed that Bitcoin mining activities used 100 TWh per year, while the gaming industry drew 105 TWh per year.
Although energy consumed by Bitcoin mining activities has increased in the past few years, the industry only accounts for 0.06 percent of the world’s total energy consumption.
The research firm also compared Bitcoin mining to other industries that consume a high volume of energy. Gold mining requires 240 TWh annually, 2.5 times Bitcoin mining’s needs. Meanwhile, the paper industry demands 2,361 TWh per annum, 24 times higher than Bitcoin mining.
Arcane Research explained that Bitcoin miners did not utilize energy the same way as other conventional industries for several reasons. Electricity accounts for 80 percent of Bitcoin mining’s operation costs. Because of that, miners find ways to save energy or move to regions where energy cost is lower.
Bitcoin mining is also a “unique” industry because each mine is “location independent.” Cryptocurrency miners can install a mining facility anywhere and utilize energy resources not used by other industries. Thus, it is not limited to energy-use restrictions commonly imposed by governments on businesses at certain industrial locations
Another quality that allows a Bitcoin mining facility to conserve energy is modularity. Miners can scale up and use excess energy available in the system because the individual AISC machines required for mining can be linked in any quantity. The AISC machines are also portable, which makes the relocation process easier.
The miners can adjust electricity consumption “watt by watt” as they are able to switch the machines on and off at any given time, unlike factory machines. Arcane Research added its demand-response quality enabled Bitcoin mining to run flexibly based on the grid demands.
Bitcoin as solution to global energy crisis
Data showed that Bitcoin mining’s energy flexibility enabled it to complement wind and solar grids developed as alternatives to conventional energy sources. Energy from those alternative power grids tends to be unstable, which might be costly if utilized in other industries, such as data centers and steel plants. However, Bitcoin mining facilities do not mind energy interruption and can adjust their systems quickly with minimum costs.
Arcane Research said that Bitcoin mining could reduce carbon emissions if a facility is close to oil wells. The facility can solve gas flaring issues that commonly occur when extracting oil. The research firm said that Bitcoin could reduce “emissions of 6.32 tons of CO2 equivalents per year, compared to 1.3 for wind and 0.98 for solar” per $1,000 investment.
There is a possibility of utilizing Bitcoin mining’s byproduct, heat, to solve the global energy crisis. It can be used to heat up households and business establishments during the winter season at lower costs. Heating during cold months accounts for about 40 percent of the world’s carbon emissions.
This finding offers a solution to countries that require a higher volume of energy during cold seasons. Europe, for example, currently experiences a 9.1 percent inflation due to energy shortages.