While much of the world marvels at bitcoin’s meteoric rise, another part is focused on an environmental byproduct: The sheer amount of electricity that crypto-currencies use. By some estimates, bitcoin’s consumption alone exceeds — or will exceed — that of Ireland, Denmark, Japan or even the entire world.
Instead of worrying about how soon bitcoin will melt the polar ice caps, though, it’s worth considering how much energy might be saved. Digital currency is wasteful by design. Bitcoin “miners,” who process transactions in return for new currency, must race to solve extremely difficult cryptographic puzzles.
This computational burden helps keep the transaction record secure — by raising the bar for anyone who would want to tamper with it –- but also requires miners to build giant farms of servers that consume vast amounts of energy. The more valuable bitcoin becomes, the more miners are willing to spend on equipment and electricity.