Crypto data centers: the good, the bad and the electric

A single tweet in May 2021 brought unprecedented public attention to a relatively unknown issue. Tesla CEO Elon Musk tweeted that because of the large energy consumption associated with the use of Bitcoin, Tesla would no longer accept it as currency. Instead, Tesla would favor other cryptocurrencies that use less than 1% of Bitcoin's energy per transaction. There has since been much debate — and varying data — about just how much energy crypto data centers consume, yet little focus on how innovative and efficient these facilities can be.

A study by the UK’s Cambridge Centre for Alternative Finance in April 2021 put global power demand by Bitcoin alone at 143 terawatt-hours (TWh) a year. By comparison (according to various estimates*) all the world’s data centers combined used between 210 TWh and 400 TWh — or even more — in 2020. (See Are proof-of-work blockchains a corporate sustainability issue?)