Bitcoin mining does not use 8% of global electricity although US talk show hosts think so

On a recent episode of “Real Time with Bill Maher,” Maher claimed that crypto consumes 8% of global electricity, likening its impact to adding 15.7 million gas-powered cars to the road. Maher argued that crypto mining negates progress made in green energy, stating, “All the progress that we’re making with green energy is being sucked away by crypto.”

The dirty little secret about crypto that no one talks about. pic.twitter.com/8Pa8LjkR93

— Bill Maher (@billmaher) September 24, 2024

However, data indicates these figures may be significantly inflated. Bitcoin, the largest digital asset, consumes approximately 150 terawatt-hours of electricity annually—less than 1% of global electricity usage, according to the International Energy Agency. Estimates place the combined energy consumption of all cryptocurrencies between 0.4% and 0.9% of annual global electricity use, as reported by Columbia Climate School.

In fact, data centers used for AI and communications are estimated to use between 2% and 3% of global electricity usage. Where are the talk show hosts calling for shutting down Google, Amazon, and Microsoft?

According to RMI, Ethereum’s transition to a proof-of-stake mechanism has reduced its energy consumption by over 99.9%, aligning it with traditional payment networks like Mastercard. Bitcoin, however, remains the primary energy consumer due to its proof-of-work system.

Further, Bitcoin mining surpassed 60% renewal energy usage years ago and continues taking advantage of wasted energy from processes like gas flaring and stranded energy in remote locations.

Additionally, Bitcoin miners are able to curtail demand based on energy grid requirements, making it a powerful tool for optimizing electricity grids around the world.

Maher, a critic of Donald Trump, appears to be falling into the partisan trap of underestimating and misunderstanding the true nature of Bitcoin, in part due to Trump’s endorsement of the industry. While commentators like Maher may disagree with Trump on fundamental policy issues outside of Bitcoin, it is reckless to label crypto as “a grifter’s paradise” by association.

Bitcoin has a positive impact on the global climate, but understanding this requires an appreciation of the nuances of energy production, usage, and management.

Unlike fiat currencies, Bitcoin does not create derivative value above and beyond its direct relationship with energy usage.