Diemer says that Bitcoin mining “takes a lot of energy, around 170 Terawatts per block,” but he also says to be careful about how we frame energy use when it comes to blockchain management.
“I don’t like the term energy usage because I think that’s disingenuous,” Diemer said. “We should be thinking about the word carbon emissions, or CO2 footprint…[we should] be concerned about the CO2 footprint of any kind of energy consumption.”
To his point, the laser focus on Bitcoin energy use leaves out several key factors. For example, Diemer explained that Bitcoin obtains “74% of electricity from renewable sources,” a statistic backed up by a 2019 CoinShares report. “Do we care about how much energy is consumed, if it’s renewable? No, because it’s renewable.”
On the other hand, that leaves 26% of Bitcoin’s electricity coming from non-renewable sources.
Can Bitcoin miners decrease their energy use?
Diemer proposes that when it comes to energy management, crypto miners might be more concerned than most because it affects their bottom line. “Bitcoin mining is a business proposition. You want to get the cheapest energy to do this business because it takes a lot of energy to mine Bitcoin. Therefore, anything that is not the cheapest possible is a negative against your business.”
Miners try to lower energy costs by using energy that might otherwise be wasted. There is plenty of wasted energy to make use of. According to the U.S. Energy Information Administration, as much as 60% of the energy produced globally is lost.
How miners use surplus energy
According to Diemer, “Bitcoin miners purposely set up next to renewable power sources and use their excess energy,” and they “actively search out the cheapest, most efficient ways to conduct this business.” Diemer gives the example of a recent podcast guest that “flew to Sichuan (China) and found one of the many dams that are there and nestled up next to it and started a partnership with them.”