In the fast-paced world of digital currencies, Bitcoin has emerged as a groundbreaking phenomenon, captivating the attention of investors worldwide. At the heart of this revolutionary cryptocurrency lies a process known as Bitcoin mining, which fuels its operation and holds significant implications for the entire blockchain ecosystem. In this article, we will delve into the world of Bitcoin mining and energy consumption statistics and why it matters for both the growth of Bitcoin and the environment.
Whether you’re a seasoned investor or new to the cryptocurrency landscape, discovering the ins and outs of Bitcoin mining is a must to grasp the true potential of this digital asset. So let’s dive in and explore the intriguing world of Bitcoin mining, shedding light on its significance and the critical information you need to know.
Energy Consumption of Bitcoin Mining Statistics
Bitcoin mining energy consumption has become a subject of significant interest and scrutiny. As the popularity and value of Bitcoin have surged, so has the energy required to mine new coins and maintain the blockchain.
According to the New York Times, Bitcoin mining consumes roughly 0.5% of all energy produced worldwide.
The electricity consumed annually in the state of Washington is equivalent, equivalent to over a third of the electricity utilized for residential cooling throughout the US annually.
Additionally, the electricity consumed by Bitcoin mining is over seven times higher than the combined energy usage of Google’s worldwide operations.
In Bitcoin’s early days, when it had a limited following, a single desktop computer could effortlessly mine the cryptocurrency in seconds.
The same report revealed that it requires approximately “9 years of typical household electricity” to mine a single bitcoin.
In May 2023, Bitcoin mining was estimated to consume around 95.58 terawatt-hours of electricity.
It reached its highest annual electricity consumption in 2022, peaking at 204.5 terawatt-hours, surpassing the power consumption of Finland.
As of August 2022, Bitcoin is estimated to account for 60-77% of global crypto-asset electricity usage.
According to a White House report, the total energy consumed by Bitcoin mining in 2022 reached 50 billion kilowatt-hours, highlighting the significant scale of energy usage.
The power consumed by Bitcoin mining exceeds the combined energy usage of all operational computers in the United States.
Additionally, it falls within the country’s overall electricity consumption range, even for essential needs such as lighting.
A single Bitcoin transaction requires 1,449 kWh to complete, which is approximately the same amount of power consumed by an average US household in 50 days.
In monetary terms, considering the US average cost per kilowatt-hour (kWh) of 12 cents, a Bitcoin mining transaction would result in an energy bill of approximately $173.
If the Bitcoin network’s energy consumption were treated as a country, it would rank 34th in terms of energy consumption.
The energy consumption of a single Bitcoin transaction is equivalent to the energy consumption of nearly 100,000 Visa transactions.
In May 2023, Bitcoin’s energy consumption per transaction reached 703.25 kWh, while Visa’s consumed 148.63 kWh.
How to Calculate Bitcoin Mining and Energy Consumption
Determining the exact energy consumption of Bitcoin mining is challenging due to various factors, including:
- The decentralized nature of Bitcoin mining
- A lack of standardized reporting requirements
- Dynamic and constantly evolving mining landscape
- Varying energy sources used by miners
- The private and confidential nature of mining operations
Estimating precise energy usage often relies on assumptions, approximations, and statistical models based on available data.
An infographic released by Digiconomist sheds light on the challenges of accurately determining the energy consumption of Bitcoin.
Therefore, given that electricity costs are a significant factor in ongoing expenses, the total electricity consumption of the Bitcoin network is closely linked to miners’ income.
US Bitcoin Mining Farms and Energy Consumption Data
The New York Times identified 34 Bitcoin mines – large-scale operations in the United States that substantially strain energy consumption.
These operations generate costs, such as increased electricity bills and significant carbon emissions, affecting individuals in their vicinity.
Each of the 34 operations identified uses at least 30,000 times as much power as the average US home.
Combined, these operations consume over 3,900 megawatts of electricity, nearly equivalent to the power usage of the surrounding 3 million households.
A Bitcoin mining farm in Kearney, Nebraska, consumes the same amount of electricity as 73,000 homes around it.
Meanwhile, an operation in Dalton, Georgia, uses power equivalent to approximately 97,000 surrounding households.
Moreover, The Riot Platform mine in Rockdale, Texas, is America’s most power-intensive Bitcoin mining operation.
It uses the same amount of electricity as the nearest 300,00 homes surrounding it.
The Riot’s mining operation, situated close to the Bitdeer mine, collectively consumes an amount of power that surpasses the energy usage of all households within a 40-mile radius.
Cryptocurrency miners in Texas have secured long-term contracts that guarantee them heavily discounted electricity prices for up to ten years.
Climate Change vs Bitcoin Mining and Energy Consumption
With an average emission factor of 557.76 gCO2/kWh and an estimated electric load demand of 13.39 GW for the Bitcoin network as of August 2021, Bitcoin mining could potentially emit around 65.4 megatonnes of CO2 annually.
The carbon footprint of Bitcoin mining can be estimated based on electricity sources used by miners.
The image below represents the approximate global carbon footprint of Bitcoin mining, which is similar to the emissions of a country like Greece (56.6 MtCO2 in 2019).
Additionally, it accounts for 0.19% of global emissions.
By May 2021, Bitcoin mining had generated approximately 31,000 tons of electronic waste annually.
This figure had risen to 35,000 tons per year by June 2022, which is equivalent to the annual electronic waste production of the Netherlands.
For example, Greenidge LLC, a natural gas power plant in New York State, generates an approximate annual emission of 88,440 metric tons of CO2-eq while conducting behind-the-meter Bitcoin mining.
If the power plant were to allocate 100% of its generation capacity to Bitcoin mining, the annual emissions would reach a total of 656,983 metric tons of CO2-eq.
Approximately 79% of the total greenhouse gas emissions stem from generating electricity, making it the main contributor.
At maximum capacity, the annual emissions are equivalent to those produced by around 140,000 passenger vehicles or the emissions resulting from the combustion of 600 million pounds of coal.
Are there benefits behind the energy consumption of Bitcoin mining?
To counter the adverse effects of Bitcoin mining, the Bitcoin Mining Council (BMC), a global forum consisting of mining companies representing 48.4% of the global Bitcoin mining network, revealed that renewable energy sources accounted for 58.9% of the electricity used in Bitcoin mining operations in Q4 2022.
This represented a noteworthy surge from the estimated 36.8% reported in Q1 2021.
Additionally, a research paper released by the Bitcoin Clean Energy Initiative Memorandum reported that Bitcoin miners are an ideal complementary technology for renewables and storage.
Other key highlights which underline the benefits of Bitcoin mining in the research paper include:
- Bitcoin mining can accelerate the global energy transition to renewables.
- Bitcoin mining could encourage investment in solar systems with potentially no change in the cost of electricity.
Bitcoin Mining Market Size and Revenue Statistics
Bitcoin mining, the process of validating transactions and securing the network, has evolved into a competitive industry. As a result, the market size and revenue generated by Bitcoin mining have grown exponentially.
The market has become highly lucrative, with numerous participants worldwide, both individual miners and large-scale mining operations.
Propelled by its surging price, Bitcoin reached new heights in November 2021, surpassing $65,000 and establishing an all-time high for the cryptocurrency.
This significant price increase has contributed to Bitcoin’s substantial market capitalization of $597.8 billion as of June 2023.
The maximum supply of Bitcoin is set at 21 million coins.
It ensures scarcity and is a fundamental aspect contributing to Bitcoin’s value proposition.
In March 2023, the number of mined bitcoins surpassed 19 million, leaving approximately 2 million bitcoins yet to be mined.
Once this threshold is reached, no additional bitcoins will be created, signifying the completion of the total available supply.
This scarcity, in turn, underpins the total market capitalization of Bitcoin mining, which currently stands at $8.11 billion.
Largest Bitcoin Mining Companies Data
A list compiled by CompaniesMarketCap included the valuation of the 16 largest publicly traded Bitcoin mining companies.
Among the key players in this industry, Marathon Digital Holdings takes the lead as the largest Bitcoin miner, boasting a market capitalization of $2.27 billion.
It is worth noting that additional mining firms may be publicly traded but not listed on the provided list due to their smaller size. Furthermore, numerous crypto mining companies are privately held entities, so their shares are not traded on stock exchanges.
Canaan is the top publicly traded Bitcoin mining company by revenue, with a total of $650 million reported in 2022.
The Chinese Bitcoin mining company’s revenue is primarily derived from sales of Bitcoin mining machines.
In addition, Canaan is the top publicly traded Bitcoin mining company by earnings, achieving a total of $92.33 million in earnings across all four quarters of 2022.
In 2021, the company’s earnings experienced significant growth, reaching $300 million, which marked an improvement compared to its 2020 losses of $31.2 million.
Bitcoin Mining Revenue Data
As of June 26, 2023, the daily revenue generated by Bitcoin miners stands at $27.70 million, exhibiting growth compared to the $18.20 million recorded in the previous 12 months.
This represents a significant increase of 52.20% from the corresponding period in the previous year.
In April 2021, Bitcoin miners achieved their highest daily revenue since 2018, reaching a remarkable sum of $80.12 million.
Bitcoin miners experienced an exceptionally high exchange interaction of $128 million in a single transaction on June 27, 2023, as reported by Glassnode.
This amount represents a staggering 315% of their daily revenue.
Sources of Revenue for Bitcoin Mining
Miners receive income from two sources, Bitcoin Block Rewards and transaction fees.
Bitcoin rewards are obtained by miners who successfully mine a block in the blockchain system. To claim the reward, the miner adds it to the start of the block.
Approximately every four years, the reward for successfully mining a block in the Bitcoin network undergoes a halving, cutting it in half.
When Bitcoin was introduced, the block reward for mining was 50 bitcoins.
As of June 2023, the mining reward for each block of transactions is 6.25 Bitcoins, approximately every 10 minutes. The next halving is expected around 2024. It will drop the block reward to 3.125 BTC.
Created Per Day
|January 3rd, 2009||Block 0||50||7200||N/A|
|November 28th, 2012||Block 210,000||25||3600||$12|
|July 9th, 2016||Block 420,000||12.5||1800||$663|
|May 11th 2020||Block 630,000||6.25||900||$8740|
|TBD 2024||Block 840,000||3.125||450||N/A|
Bitcoin halvings will occur approximately every 210,000 blocks until around the year 2140, marking the point at which all 21 million coins will have been mined.
Once the block reward reaches zero, miners will solely receive rewards in the form of transaction fees associated with the transactions included in the block.
Transaction fees are paid by users to miners for including their transactions in the Bitcoin blockchain.
They serve as an incentive for miners to prioritize and include transactions in the blocks they mine.
As of June 28, 2023, the average Bitcoin transaction fee is at a level of $2.226, up from $1.168 12 months before.
The average Bitcoin transaction fees have the potential to surge, similar to what occurred in April 2021 when they peaked at almost $62.79.
Bitcoin transaction fees can depend on several factors:
- Network congestion
- Transaction size
- Desired confirmation time.
Fee calculations are typically calculated based on the transaction size in bytes rather than the transaction amount.
As of June 28, 2023, the average block size was 1.69 MB.
Miners with higher hash rates have a better chance of receiving the block reward and transaction fees associated with adding a new block to the blockchain.
Hash rate, in the context of Bitcoin mining, refers to the computational power or speed at which a mining device or network can perform cryptographic calculations, known as hashing.
When driven by profit motives and returns, hashers typically base their coin selection on financial criteria.
This can include factors like the daily reward amount or the prices of different crypto assets.
Hash rate Index reported in May 2023, the average hash price was $82.23/PH/day (equivalent to 0.00298 BTC/PH/day), representing a 5.6% increase compared to April’s average of $77.87/PH/day (0.00270 BTC/PH/day).
For reference, a hash rate measuring table listing hash rate units are displayed below:
Miners accumulated a total of 33,365 BTC (equivalent to $918.5 million), marking a 20% increase from the 27,743 BTC (valued at $800.8 million) earned in April.
Among these rewards, transaction fees contributed 4,540 BTC ($125.8 million) in May, which reflects a remarkable 459% increase compared to the 812 BTC ($23.5 million) earned in April.
Bitcoin Mining Statistics by Country
Different nations contribute to the complex landscape of Bitcoin mining worldwide, from powerhouses like China and the United States to players like Kazakhstan and Russia.
Bitcoin Mining and Energy Consumption Using Hydropower in China
Before the ban on Bitcoin mining in June 2021, China was the uncontested leader in hash rate production and power consumption, with almost 50% of network hash rate.
The ban significantly impacted the movement of hash rate from China, resulting in a substantial decrease.
According to the Cambridge Bitcoin Electricity Consumption Index (CBECI), China held the title of the world’s largest cryptocurrency mining hub at its peak, commanding a substantial 65% to 75% global share of the Bitcoin network’s total hash rate.
China’s monthly average global hash rate dropped from 75.5% in September 2019 to 22.3% in September 2021, marking a significant decrease of over 50%.
During the summer rainy seasons in China, abundant hydropower is available in certain regions, which leads to decreased electricity costs.
Miners took advantage of this by relocating or expanding their operations to regions with ample hydropower resources, such as Sichuan.
At the start of the wet season in 2020, Sichuan accounted for 14.9% of China’s total mining power, but this figure rose to 61.1% at its peak.
In contrast, Xinjiang, which relies predominantly on coal power, witnessed a decline in its hash rate share from 55.1% at the start of the wet season to 9.6% at the lowest point during the same period.
US Bitcoin Mining Statistics
The US is the largest Bitcoin mining industry globally, representing over 38% of the global Bitcoin network’s hash rate.
From January 2020 to January 2022, the US witnessed a significant increase in its global share of Bitcoin mining, climbing from 4.5% to 37.8%.
Georgia had the highest hash rate share in the US, with 30.8% in December 2021.
Texas claimed the second spot with 11.2%, while Kentucky secured a notable 10.9%, making for a competitive landscape of Bitcoin mining in the country.
With a mining cost of $54,862.05 and a profit of -$24,617.20, Hawaii stands out as the most expensive state for mining 1 bitcoin.
The chart below shows the top 10 most expensive states for mining one Bitcoin.
Louisiana is the most affordable state, costing a total sum of $14,955.14, with a profit of $15,289.71.
Global Movement of Bitcoin Mining Distribution
The movement of mining power from China shifted the global mining distribution, resulting in other countries, namely Kazakhstan and Russia, being the primary beneficiaries of the redistributed hash rate.
Based on data provided by World Population Review, the current hash rates of the leading countries in Bitcoin mining, as of 2023, are as follows:
- United States: 35.4%
- Kazakhstan: 18.1%
- Russia: 11.23%
- Canada: 9.55%
- Ireland: 4.68%
- Malaysia: 4.58%
- Germany: 4.48%
- Iran: 3.1%
Many Chinese Bitcoin miners relocated their operations to Kazakhstan after the ban, due to the country’s close proximity and natural abundance of fossil fuels.
In 2019, fossil fuels contributed to 84% of Kazakhstan’s electricity generation, while hydropower accounted for 12%, and solar and wind installations contributed less than 2%. Coal, primarily sourced from the northern regions, powered over 70% of the country’s electricity generation.
Kazakhstan’s electricity is generated by 155 power plants under different ownership models.
As of January 1, 2022, the combined installed capacity of power plants in Kazakhstan reached 23,957 MW, with an available capacity of 19,004 MW.
Between September 2019 and September 2021, Kazakhstan experienced a remarkable surge in its worldwide Bitcoin mining share, skyrocketing from 1.3% to an impressive 24.3%.
The country’s Bitcoin mining business thrives due to coal’s affordability and energy efficiency. Furthermore, Bitcoin miners in Kazakhstan follow a rigorous schedule, working 12-hour shifts continuously for a two-week period until the Bitcoin is successfully mined.
However, according to a report by Russian media Kommersant in April 2023, Russia has emerged as the second-largest Bitcoin miner globally, following the United States.
Bitriver, Russia’s top crypto mining company, has its data centers powered by Gazprom Neft, the country’s third-largest oil producer. To meet the electricity demand for digital currency production, petroleum gas will be utilized as the energy source.
Although the US maintains a significant lead with a 3-4 gigawatts mining capacity, Russia’s generating capacity reached 1 gigawatt during January-March 2023.
This shift in ranking for Russia coincides with the United States implementing tax and regulatory measures on crypto mining at state and federal levels, creating a less favorable environment for the industry in the United States.
Bitcoin Mining vs Other Resources Costs
Due to its scalability challenges, Bitcoin is often likened to “digital gold” rather than a payment system.
Consequently, a comparison can be drawn between Bitcoin mining and gold mining.
Approximately 3,531 tonnes of gold are mined annually, producing a total emissions volume of 81 million metric tonnes of CO2.
When contrasting the carbon intensity of Bitcoin mining to that of mining physical gold, it becomes apparent that the former surpasses the latter.
It’s important to note that this calculation encompasses mining fees, which do not exist in the context of physical gold mining.
Furthermore, this comparison is flawed since we can cease mining for physical gold, whereas active mining is integral to Bitcoin’s existence.
The energy costs of material extraction can vary significantly depending on the specific material and extraction method. For example:
According to the United States Geological Survey (USGS), the energy consumption for copper mining ranges from 0.2 to 1.5 gigajoules per metric ton (GJ/t) of copper produced.
Electrical uses of copper account for about three-quarters of total copper use.
Approximately 17,000 kilowatt-hours (kWh) of electricity are needed to produce one metric tonne of aluminum.
The electrical energy required for aluminum production is typically sourced from thermal power plants, which typically operate at a maximum efficiency of around 30%.
In 2021, U.S. electric utilities and independent power producers utilized the following annual average quantities of coal, natural gas, and petroleum fuels to generate one kilowatt-hour (kWh) of electricity:
- Coal–1.12 pounds/kWh
- Natural gas–7.36 cubic feet/kWh
- Petroleum liquids–0.08 gallons/kWh
- Petroleum coke–0.82 pounds/kWh
How much energy does Bitcoin mining consume?
What is the market cap of Bitcoin mining?
The New York Times
The White House
U.S Energy Information Administration
Tech Transparency Project
The International Journal of Life Cycle Assessment
Bitcoin Mining Council
Bitcoin Clean Energy Initiative Memorandum
Companies Market Cap
Global Crypto Asset Benchmarking Study
Hashrate Index Report
Blue Sky Capital
The Bitcoin Mining Network Report
Cambridge Bitcoin Electricity Consumption Index
World Population Review
International Trade Administration
United States Geological Survey
Data, Statistics, and Useful Numbers for Environmental Sustainability