Given that the price of Bitcoin peaked at about $ 69,000 in November, annual electricity consumption is estimated at approximately 180 to 200 terawatt-hours (TWh). This is approximately the same amount of electricity used by all data centers in the world every year.
Higher prices generally encourage mining as the reward is higher. However, according to a study published last year by digital currency economist Alex de Vries, prices do not have to stay high for Bitcoin to remain “hungry” for energy. As long as the price is above $ 25,200, the Bitcoin network can withstand mining operations that consume about 180 TWh per year, writes The Verge.
Prices below that $ 25.2 thousand threshold could force miners to pause operations or smaller miners because they don’t want to risk their electricity consumption being higher than the earnings they will generate by mining new tokens.
However, it is still too early to make concrete predictions about whether the fall in the price of Bitcoin will ultimately be beneficial for the environment. Given the period in which Bitcoin held extremely high value, many miners have savings that will keep them going for a while.
A sustainable price of about $ 24,000 could reduce the global energy consumption of the Bitcoin network to about 170 TWh per year. This sounds like an incremental change, but it could contribute to a significant drop in electricity use and a reduction in the greenhouse gases generated by the process. If we compare this to the annual energy consumption of the Bitcoin network for most of 2022, it would be like reducing the amount of electricity Ireland consumes over the course of a year.
Bitcoin mining is energy inefficient, and as it is the most well-known cryptocurrency, changes in value are significant for the environment. The second largest network of cryptocurrencies, Ethereum, uses the same type of energy-intensive process on its blockchain and has similarly recently experienced a decline in value.