Bitcoin mining is using up to 2 per cent of total energy produced in the United States, a high enough share for the policymakers to sit up and take notice.
The increased consumption has sparked a concern among the stakeholders about the activity's contribution to carbon dioxide in atmosphere.
According to report by the US Energy Information Administration, annual electricity use from cryptocurrency mining is likely to be between 0.6 per cent and 2.3 per cent of US electricity consumption.
The US government body for its report used the data from the Cambridge Centre for Alternative Finance, as well as places where mining activity is taking place and the among of electricity each such unit may be using.
"Although cryptocurrency mining began in the United States about a decade ago, the activity began to expand rapidly in 2019. Recent growth is largely due to cryptocurrency mining operations relocating to the United States from China after that country cracked down on digital currency mining in 2021, though reports indicate that there may still be some mining in Chin," EIA said in its report.
Citing data from the Cambridge Bitcoin Electricity Consumption Index, the body said world over bitcoin mining consumed anywhere between 67 TWh to 240 TWh in 2023, with global electricity consumption to have been 27,400 TWh.
"So, the CBECI estimates put electricity supporting Bitcoin mining in 2023 at about 0.2% to 0.9% of global demand for electricity. Based on those estimates, global electricity use in cryptocurrency mining was about the same as total electricity consumption in Greece or Australia, respectively," it said.
Bitcoin mining involves a proof of work system to mine a bitcoin. Miners world over use high powered graphics processing units, or GPUs, to mine each bitcoin which involves solving a cryptographic puzzle in way of generating a proof of work. Each transaction is added to a blockchain, an open decentralized ledger, which can be validated by miners individually.
In return, miners get paid a reward with a bitcoin – a fraction of it to be precise – to keep them going. All this requires high electricity consumption.
On the other hand, Ethereum, the other major cryptocurrency network, uses a proof of stake system, which requires each miner or validator to stake a part of the network's native currency to validate a transaction.
The report said that Ethereum represents 0.005 per cent of the power demand of Bitcoin, largely because of its different consensus mechanism.
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