Bitcoin Mining consumes more energy on a yearly basis than used by Finland. But does that matter? – Cryptocurrency News

In a previous article, we introduced the concept of Bitcoin mining and how it powers the decentralized network behind the world’s leading cryptocurrency.

At its core, mining is the process of using computational power to solve complex mathematical puzzles. This process—known as proof-of-work—requires electricity, as machines (called ASICs) continuously generate cryptographic hashes. The miner who successfully solves the puzzle first earns the right to add a new block of transactions to the Bitcoin blockchain and receives a reward in Bitcoin. And this consumes energy. Mainly because the winner and the loser spend this energy. And only the winner gets paid.

This effort, however, is not without energy costs. As of 2023, Bitcoin mining was estimated to consume around 91 terawatt-hours (TWh) of electricity annually. By comparison, Finland, a developed nation of 5.5 million people, used 80 TWh in 2022 to power homes and provide heating. On the surface, this seems alarming—and critics have not hesitated to voice concerns. Columbia University’s Climate School, for example, published a report titled “Crypto’s Dirty Little Secret,” arguing that Bitcoin mining contributes significantly to global carbon emissions.

But raw numbers often lack perspective.

In 2023, the total global electricity generation was 29,665 TWh. Now let us do a comparison. So bitcoin uses only less than 0.5% of total energy produced and consumed. When viewed in this broader context, the alarmist narrative starts to lose traction.

It’s also important to consider what Bitcoin is replacing or competing with. Money and financial infrastructure—whether digital or physical—require energy. In 2014, it was estimated that the traditional global banking system consumed roughly 660 TWh per year. This includes everything from ATM networks and data centers to bank branches and financial professionals worldwide. That’s over seven times what Bitcoin mining consumes today.

The case of gold is also illustrative. Long used as money, gold must be mined, refined, and distributed, all of which demands energy. In 2020, gold mining operations consumed 245 TWh of electricity and emitted 145 million tons of CO₂. By comparison, Bitcoin’s footprint appears far less egregious.

When you start to compare Bitcoin with other forms of money suddenly bitcoin mining does not look like that evil energy waste anymore right? This is what perspectives and comparisons bring into the issue at hand.

When money is easy to counterfeit or reproduce, it loses its value. That’s why governments once used gold—because it was scarce, costly to forge, and verifiable. In modern times, to protect fiat currencies, governments spend vast amounts to prevent counterfeiting and maintain confidence in their monetary systems. Bitcoin solves this differently: its cost to produce is built into its security model. The energy required to mine a Bitcoin is part of what ensures its integrity.

If we subscribe to climate alarmists’ calls, we should stop using gold, internet, planes and cars. There is plenty of energy that can be harnessed just like there is more than enough food that can be made from this earth.

The world has more than enough energy potential, just as it has enough food; the challenge is distribution and efficiency. Anecdotally, we’ve all been told not to waste food because “some child in another part of the world is starving.” While the sentiment is noble, it overlooks a key reality: waste here does not fix scarcity there. The same is true for energy.

Let us dig deeper into how Bitcoin uses the energy for mining. A miner profits when he spends energy and receives a bitcoin. If he spends more energy to receive a bitcoin than the price of bitcoin in the market he will make a loss and will have to shut shop. Bitcoin miners, recognizing the costs of energy, are constantly optimizing. Because mining becomes unprofitable when electricity costs exceed rewards, miners seek the most efficient and inexpensive energy sources.

 Miners try to place their mining nodes or machines near a hydroelectric  power plant which uses running water and produces electricity at a cheaper rate. Sichuan, China hosted significant mining during the rainy season due to excess hydroelectricity. Then China did a crackdown and overnight these machines just moved to US or Kazakhstan.

Bitcoin mining machines (ASICs) generate significant heat during operation. Cooling them is one of the largest energy costs in mining. By locating miners in cold regions (like Iceland, northern Canada, or Siberia), operators can use ambient air instead of expensive air conditioning systems, reduce reliance on fans and HVAC systems, cutting both electricity usage and maintenance costs and achieve better hardware performance due to lower temperatures. This leads to lower operating costs and a lower energy footprint per unit of hash power

Another way miners do it is by placing portable data center near gas flaring sites. Gas flaring is the process of burning off excess natural gas that’s uneconomical to transport or sell, especially in remote oil fields. Instead of letting this energy go to waste miners install portable data centers near oil wells. They use generators powered by this flared gas to run mining equipment. This converts otherwise wasted energy into productive use—securing the Bitcoin network and earning revenue. This approach reduces carbon emissions from flaring (methane is more harmful than CO₂ if vented directly) and makes use of stranded energy that cannot be easily sold or used elsewhere.

In all of these cases, Bitcoin mining isn’t stealing energy from hospitals or homes—it is repurposing excess or stranded energy that would otherwise be wasted.

So, the next time someone says Bitcoin is “evil” or an environmental hazard, consider the broader picture. Yes, Bitcoin mining uses energy. But so do banks, gold mines, and every other system that underpins our global economy. The real question is not whether energy is being used, but whether it is being used productively and efficiently. In that light, Bitcoin may not be the villain—it might just be misunderstood.

Nithin Eapen is a technologist and entrepreneur with a deep passion for finance, cryptocurrencies, prediction markets and technology. You can write to him at neapen@gmail.com

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