Education • 12 min read
By Bitpanda
03.06.2025
Bitcoin’s environmental impact is one of the most debated issues in crypto. Critics often claim that its energy consumption is excessive and unsustainable. But how much of that criticism is rooted in facts? And are we really looking at the full picture? In our Bitpanda Blog series Mythbusters, we cut through the noise to present the facts fairly so you can decide for yourself. Let’s take a closer look.
Bitcoin mining is frequently criticised in the media for its energy consumption. But to evaluate its impact fairly, we need to look beyond surface-level figures. The most important questions are: what type of energy is being used, what purpose does it serve, and why is it needed in the first place?
Concerns about Bitcoin’s energy use aren’t new. As far back as 2017, headlines from outlets like the World Economic Forum and Newsweek warned that Bitcoin could soon consume as much electricity as the United States, or even the entire world. Yet these predictions never materialised. Today, Bitcoin accounts for just 0.07% to 0.5% of global energy consumption (around 176,000 TWh), a relatively small share within the broader energy landscape.
Equally outdated is the idea that mining runs mostly on fossil fuels. In reality, the industry has shifted quickly. Because miners seek the lowest-cost electricity, they’re increasingly tapping into renewable sources and surplus energy that would otherwise go to waste. This trend is already driving clean energy growth, cutting emissions and even helping to stabilise power grids in some areas. Most importantly, BTC mining gives more people access to electricity and helps lower prices where energy use wouldn’t otherwise be economically viable.
When we discuss Bitcoin’s energy use, it’s important to move beyond the raw numbers. Rather than fuelling fear through oversimplified comparisons (e.g. comparing to entire nations), it’s more important to focus on the underlying context: where the energy comes from and what it enables. That means understanding the goals of the BTC network and the positive impact it can have.
Here are a few key facts:
Let’s unpack this myth in more detail and take a closer look at what Bitcoin’s energy use actually involves.
Bitcoin mining consumes energy, that’s a fact. But so do many other industries, and often on a much larger scale. The global financial sector, for example, uses around 28 times more energy than Bitcoin. Gold mining not only consumes more but also causes far greater environmental harm due to its reliance on heavy machinery and toxic chemicals. AI models are also driving up energy demand, yet this rarely sparks the same level of public debate.
One of the most common critiques levelled at Bitcoin is its total energy use, often presented through comparisons with entire countries. These comparisons may sound dramatic, but they are misleading. They strip away essential context and reduce a complex issue to a single, attention-grabbing number. If the same lens were applied to other sectors, such as cloud computing or space exploration, the figures would also seem alarming.
What’s often missing from these discussions isn’t just how much energy is used, but why it’s used in the first place. Energy underpins every aspect of modern life: it powers creation, infrastructure, communication, and progress. The same is true for Bitcoin: its energy use secures a decentralised network that enables access to a monetary system outside of traditional financial infrastructure.
The kind of energy used for Bitcoin mining is evolving rapidly. According to the BEEST Model by Daniel Batten and Willy Woo, approximately 56.2% of Bitcoin mining is powered by renewable energy – a greater share than that of France (24-28%), the EU average (44.5%), or the United States (27%).
Comparing Bitcoin’s energy use with entire countries, without considering this shift including its objective and added-value, oversimplifies the conversation and ignores progress in sustainability across the industry. In fact, Bitcoin mining is already greener than many countries.
Take Poland as an example. It’s recently been compared to Bitcoin mining in energy discussions. According to Eurostat, Poland’s share of renewable energy in gross final energy consumption was 24.5% in 2023. In 2024, renewable sources made up around 28.8% of its electricity generation so far, driven mainly by wind and solar. By comparison, Bitcoin’s reliance on renewables is significantly higher.
When we look at higher energy consumption, it’s important to consider what that energy is securing. A country’s energy use supports many systems and networks, but not all of them deliver sustainable or meaningful economic value. Many don’t directly empower individuals financially or socially.
Bitcoin mining, on the other hand, supports the security and operation of a decentralised digital and resilient network that enables the use of an alternative monetary asset. It serves as a store of value, a hedge against inflation, or a means of accessing financial tools. In certain regions, it can offer individuals greater financial autonomy, including in places affected by currency instability or limited economic freedoms.
The energy used in mining strengthens the network’s security, protects it from attacks and ensures that creating new coins remains difficult, similar to the value derived from gold. And looking ahead, it’s important to recognise that progress and innovation naturally demand more energy. That’s a reality of development, not a drawback.
In countries like Bhutan and El Salvador, Bitcoin and mining are supported rather than dismissed. It’s a way to monetise stranded energy that would otherwise go unused. So the real question isn’t just how much energy is used, but what it’s used for.
TL;DR: Every innovation, from the printing press to the internet, faced scepticism. Energy use alone isn’t the problem. It’s whether the system it powers delivers meaningful benefits. For Bitcoin, the answer is increasingly clear: it does.
Understanding how Bitcoin’s energy use is measured is just as important as the numbers themselves. As with climate research, the methods and assumptions behind these models significantly influence the results. What’s included, what’s left out and how reliable the data is, all shape the conclusions we reach. That’s why it’s essential to understand and question the foundations of reports and data models. No assumption is ever 100% bulletproof.
Even respected models, such as the one developed by the Cambridge Centre for Alternative Finance (CCAF), clearly state their own limitations. As the CCAF notes:
“Our estimates do not account for any activities that could reasonably be expected to reduce emissions, such as using flare-gas, off-grid (behind the meter) Bitcoin mining, waste heat recovery or carbon offsetting.”
This has a significant impact on the final numbers and representation, and can make reported energy use often look higher than it actually is.
Regulatory frameworks, including the EU’s MiCA and its sustainability reporting requirements, often rely on similar models and exclusions that are not specifically mentioned. When these models miss innovative mitigation strategies, so do the regulations built on top of them.
The potential of these overlooked solutions is substantial. Landfill gas (methane), for example, is a natural byproduct of decomposing organic waste that can be repurposed to power Bitcoin mining more effectively than many popular alternatives, instead of just venting or flaring (burning) it. Research suggests that just 70 mining projects powered by landfill gas could make the entire Bitcoin mining sector carbon negative.
TL;DR: No model can capture every variable. That’s why it’s vital to question how data is gathered and interpreted, understand its limitations and context, and think critically about what might be missing from the bigger picture.
It’s important to put Bitcoin’s energy use in perspective by looking at where energy is wasted elsewhere. Globally, a large share of energy is lost through inefficiencies in production, distribution, and everyday use – from household appliances to industrial systems. In the U.S. alone, around 65% of generated electricity is lost before it ever reaches an end user. To illustrate the scale: saving just 1.6% of that wasted energy could power the entire global Bitcoin mining network for a year.
TL;DR: Context matters. Rather than looking at Bitcoin in isolation, we need to consider how energy is used across the board, what outcomes it enables and where there are opportunities for smarter, more sustainable solutions.
Bitcoin mining has come a long way in terms of both efficiency and sustainability. Smarter infrastructure, better hardware and new energy strategies mean that many mining operations now run on power that would otherwise go to waste – across both renewable and non-renewable energy sources. A great example already mentioned is gas flaring (burning) or venting from oil extraction or landfill operations. Instead of releasing methane into the atmosphere, this gas is captured and used to power mining. This cuts emissions and puts unused and otherwise wasted energy to work.
“Cutting methane is the strongest lever we have to slow climate change over the next 25 years and complements necessary efforts to reduce carbon dioxide,” said Inger Andersen, executive director of the United Nations Environment Programme (UNEP). In line with this, the White House Office of Science and Technology Policy (OSTP) recognised the environmental benefits of using stranded methane and renewable energy for crypto mining in its September 2022 report. Essentially, BTC mining helps monetise waste and untapped resources.
Thanks to this shift, more than half of Bitcoin mining is now powered by renewable energy, placing it ahead of many traditional sectors. On the DAX, this would place it among the top five in sustainability rankings based on energy mix.
One of Bitcoin mining’s biggest advantages is its flexibility and portability. It can operate almost anywhere, both on-grid and off-grid (not connected to the public electricity grid), allowing it to tap into difficult-to-access or surplus energy sources. That adaptability has led to real-world use cases that often fly under the radar:
TL;DR: Rather than criticising Bitcoin mining, environmental groups and policymakers should acknowledge its potential to drive financial empowerment, support renewable energy growth, reduce energy waste and promote human rights.
Behind the energy debate (and broader discussion about the crypto sector) are stories that often go untold. Access to energy has always helped societies grow, and that still holds true today. The difference now is that we have more ways to use energy wisely. Bitcoin is part of that shift. Its energy use doesn’t just keep the network running, it supports a new kind of financial system that’s open to anyone.
Here are some of the real-world impacts Bitcoin is already making:
It’s easy to reduce Bitcoin’s energy use to a headline or a single statistic. But that rarely tells the full story. When we take a closer look, a different picture emerges – one where innovation, sustainability and positive impact come into focus. Bitcoin mining isn’t just about securing a digital network. It supports financial access where traditional systems fall short, empowers individuals to protect the value of their work, helps grow renewable energy markets and puts otherwise wasted power to use. Plus, it’s evolving quickly – driven by market incentives and innovation.
When people describe Bitcoin mining as wasteful, it’s worth asking: compared to what, and what is the added value? The data points to a more complex reality, and the myth does not hold up.
Disclaimer
This article is distributed for informational purposes, and it is not to be construed as an offer or recommendation. It does not constitute and cannot replace investment advice.
Bitpanda does not make any representations or warranties as to the accuracy and completeness of any information contained herein.
Investing carries risks. You could lose all the money you invest.
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