Cryptocurrency’s Energy Consumption Problem

The briefing highlights the significant energy consumption and emissions of Bitcoin, noting its annual consumption of 127 TWh and US emissions of 25 to 50 million tons of CO2. It discusses the transition of Ethereum to proof-of-stake as a successful model for reducing energy use by over 99.9 percent and advocates for Bitcoin to move away from proof-of-work to mitigate both emissions and e-waste. RMI details its contributions through the Crypto Climate Accord and the development of the RE Emissions Score to ensure renewable energy procurement is 'additional' rather than drawing from existing capacity. The document concludes that while RMI is ending its direct engagement with the crypto industry, it will focus on the broader goal of decarbonizing the global energy grid.

• Bitcoin's energy consumption is substantial, estimated at 127 terawatt-hours (TWh) annually, which exceeds the energy use of some countries such as Norway. In the United States, cryptocurrency activities generate between 25 and 50 million tons of CO2 every year, a level comparable to the annual emissions from US railroad diesel fuel.
• The high energy demand of Bitcoin is a result of its proof-of-work mining algorithms. In contrast, Ethereum's transition to a proof-of-stake consensus mechanism reduced its electrical usage by more than 99.9 percent, making a single transaction's energy use similar to that of a Mastercard transaction.
• Bitcoin mining faces challenges including price volatility, which may lead miners to seek the cheapest rather than cleanest electricity when profit margins drop. Additionally, there are concerns regarding the reliability of Bitcoin miners providing demand response services on power grids, such as Texas' ERCOT, because high prices may discourage them from limiting power usage.
• Current Bitcoin mining often relies on fossil fuels or claims sustainability based on proximity to renewables rather than procuring new renewable energy. RMI developed the Renewable Energy (RE) Emissions Score to help companies and miners ensure that renewable energy procurement is 'additional' and does not inadvertently increase the need for fossil generation by drawing from existing renewable capacity.

APA

RMI (2023). Cryptocurrency’s Energy Consumption Problem. https://rmi.org/resources/cryptocurrencys-energy-consumption-problem/

Chicago

RMI. Cryptocurrency’s Energy Consumption Problem. 2023. https://rmi.org/resources/cryptocurrencys-energy-consumption-problem/.

Wikipedia

{{cite report |author=RMI |title=Cryptocurrency’s Energy Consumption Problem |date=30 January 2023 |url=https://rmi.org/resources/cryptocurrencys-energy-consumption-problem/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2023cryptocurrencys, author = {{RMI}}, title = {{Cryptocurrency’s Energy Consumption Problem}}, institution = {RMI}, year = {2023}, month = jan, url = {https://rmi.org/resources/cryptocurrencys-energy-consumption-problem/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }