While writing the world's most famous white paper, Satoshi Nakamoto defined the Bitcoin (BTC) mining process. It was established that the minting of new coins would take place through proof-of-work. To carry out this verification and to be able to mine the cryptocurrency, computers need to solve complex mathematical calculations.
In the beginning, there were not many miners. However, that changed before the first Bitcoin bull run. Mining competition skyrocketed, causing a sharp increase in the cost of machines capable of competing. Even more importantly, energy demand exploded with the new machines(ASIC miners) — which needed energy mainly for processing and cooling.
After eight years, the energy demand for mining Bitcoin has grown — and today has reached to ~120 terawatt-hours per year, according to data from the Cambridge Bitcoin Electricity Consumption Index, or CBECI. This would place Bitcoin’s energy use somewhere between the United Arab Emirates and the Netherlands, two countries with a combined population of approximately 27 million people.
At first glance, this seems like a lot, right? But let's take a closer look at the data to gain a better understanding of the real impact that Bitcoin mining has on the environment.
Source : https://cbeci.org/
Comparing the energy use of cryptocurrencies with the traditional banking sector — or fiat, in particular — might look quite devastating like Bitcoin, for instance, is estimated to consume 123.77 billion kilowatt-hours of energy annually, compared with 2.64 million kWh for cash. According to Digiconomist founder Alex de Vries, if Bitcoin became the world’s reserve currency, global energy production would need to double.
In terms of the difference in transaction volume: While the Visa network completed over 185 billion transactions in 2019 alone, Bitcoin has facilitated 643 million since its inception.
Current estimates are that a single bitcoin (BTC, +9.26%) transaction has a carbon footprint of over 350 kilograms (772 pounds).
US Democratic Senator Elizabeth Warren claimed that Bitcoin "requires so much computing activity that it eats up more energy than entire countries."
Tesla stopped accepting Bitcoin claiming that there is a huge environmental concern attached to it due to fossil fuels being used for bitcoin mining and transactions. This is not the case. In fact, he conveniently missed that 75% of bitcoin minors use renewable energy sources.
This selective representation of facts led to widespread pessimism about bitcoin and people started selling it. Right after this tweet, the value of bitcoin plummeted. These faces of the Tesla owner are actually seen by many as market manipulation, rendering them infuriated by his tweets.