Why does bitcoin use about 0.5% of the world's electricity?

Because its security runs on a race. Bitcoin mining is a highly electricity-intensive proof-of-work process: miners run dedicated software and compete to be the first to solve the current block, a new one roughly every ten minutes, for a reward in bitcoins. Added up across the network, as of 2025 the Cambridge Centre for Alternative Finance (CCAF) estimated that bitcoin consumed 138 terawatt-hours a year, about 0.5% of the world's electricity use, with annual emissions comparable to Slovakia's. The literature describes bitcoin's environmental impact as significant, because of its energy use, greenhouse gas emissions, and electronic waste.

Where that electricity comes from varies and shifts over time. According to the 2025 Cambridge Digital Mining Industry Report, miners surveyed reported getting 48% of their electricity from fossil fuels and 52% from sustainable sources like renewables and nuclear power. The geography of mining has moved dramatically too: after China banned bitcoin mining in June 2021, operations moved to other countries, and by August 2021 mining was concentrated in the United States, Kazakhstan, and Russia instead. That move had a cost of its own: switching from Chinese coal to Kazakhstan's hard coal increased bitcoin's carbon footprint.

Mining hardware adds its own waste problem, since bitcoin is mined on specialized chips with no use other than bitcoin mining. Estimates of exactly how bad that e-waste problem is genuinely disagree: one 2021 study put bitcoin's annual e-waste above 30,000 tonnes, while a later 2024 review argued mining hardware actually lasts longer than assumed, and the CCAF estimated e-waste closer to 2,300 tonnes in 2024, since 87% of hardware is recycled, sold or repurposed. Mining facilities have also drawn complaints over noise: a 2022 investigation near a North Carolina cryptomine logged sound levels above 55 decibels in 98% of nearly 20,000 readings taken outside nearby homes.

What to do about it is contested. Proof of stake is far more energy-efficient and has been described as a sustainable alternative, but bitcoin advocates oppose switching, arguing that proof of work is needed to secure the network. Meanwhile, the OECD and the U.S. Office of Science and Technology Policy have discussed narrower mitigations, like using mining to balance electricity grids, using methane that would otherwise be vented, or running on renewable electricity that would otherwise be curtailed.