Here's How Bitcoin Uses More Power Than Many Countries

Cryptocurrencies have emerged as one of the most captivating, yet head-scratching, investments in the world.

They soar in value. They crash. They’ll change the world, their fans claim, by displacing traditional currencies like the dollar, rupee or ruble. Some of them are named after dog memes. And in the process of simply existing, cryptocurrencies like Bitcoin, one of the most popular, use astonishing amounts of electricity.

Consider this: The process of creating Bitcoin consumes around 96 terawatt-hours of electricity annually, more than what is used by the Philippines, a nation of about 110 million. That usage, which is close to half a percent of all the electricity consumed in the world, has increased about tenfold in just the past five years.

The Bitcoin network uses about the same amount of electricity as Washington state does in a year. And more than one-third of what residential cooling in the US uses up. More than seven times as much electricity as all of Google’s global operations. So why is it so energy-intensive? As it happens, managing a digital currency of that value with no central authority takes a whole lot of computing power. It starts with a transaction.