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Drivers of Bitcoin Energy Use and Emissions

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Financial Cryptography and Data Security. FC 2022 International Workshops (FC 2022)

Part of the book series: Lecture Notes in Computer Science ((LNCS,volume 13412))

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Abstract

The global Bitcoin mining industry has grown to a size where its overall energy consumption is frequently compared to that of entire countries. Indeed, as of 30 April 2022, following the successful migration of the entire Chinese mining industry after its expulsion from China in mid-2021, Bitcoin uses approximately 247.0 TWh of primary energy per year, slightly less than the entire nation of New Zealand, the 63\(^{rd}\) ranked nation by total energy consumption. To understand what drives Bitcoin’s energy use and emissions however, one must understand four key concepts: how Bitcoin works and incentivises its miners, the nature of competition in the mining industry, the nature of mining hardware and innovation, and importantly, international energy and electricity markets and the differences between them. This paper will provide a thorough explanation of these concepts, as well as provide commentary on Bitcoin’s current state, and what the Bitcoin Mining Industry may potentially look like towards the end of the decade.

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Authors and Affiliations

  1. Bitcoin Mining Council, Tyson’s Corner, VA, USA

    Hass McCook

  2. Monochrome Asset, Brisbane City, QLD, 4000, Australia

    Hass McCook

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  1. Hass McCook
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Correspondence to Hass McCook .

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Editors and Affiliations

  1. Georgetown University, Washington, DC, USA

    Shin'ichiro Matsuo

  2. Imperial College London, London, UK

    Lewis Gudgeon

  3. Cornell University, Ithaca, NY, USA

    Ariah Klages-Mundt

  4. Imperial College London, London, UK

    Daniel Perez Hernandez

  5. Imperial College London, London, UK

    Sam Werner

  6. The Australian National University, Canberra, ACT, Australia

    Thomas Haines

  7. Western University, London, ON, Canada

    Aleksander Essex

  8. University of Stirling, Stirling, UK

    Andrea Bracciali

  9. University of Trento, Trento, Trento, Italy

    Massimiliano Sala

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McCook, H. (2023). Drivers of Bitcoin Energy Use and Emissions. In: Matsuo, S., et al. Financial Cryptography and Data Security. FC 2022 International Workshops. FC 2022. Lecture Notes in Computer Science, vol 13412. Springer, Cham. https://doi.org/10.1007/978-3-031-32415-4_2

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  • DOI: https://doi.org/10.1007/978-3-031-32415-4_2

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  • Publisher Name: Springer, Cham

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  • Online ISBN: 978-3-031-32415-4

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