Energy for Growth Hub
Blog Infographics Mar 06, 2024

Bitcoin is a (Big) Country

Can Crypto Mining Coexist with Development Goals?
Making Markets Work

BLUF: Cryptocurrency mining is consuming vast and growing amounts of electricity, just as the world is pushing to cut global emissions and expand electricity for development. Countries like Ethiopia face a stark dilemma.

What’s happening

  • Energy use is spiking. In 2022, Bitcoin mining consumed 96 TWh of electricity and increased to 123 TWh in 2023, according to estimates from the University of Cambridge. A recent analysis from the US Department of Energy (DOE) also suggests crypto accounts for up to 2% of US electricity.
  • In the US, crypto miners are fighting attempts to track their energy. In Texas, Bitcoin miners are suing to prevent DOE from collecting data on the energy use of crypto mining operations they hoped would aid grid managers and power utility companies. On February 23, 2024, a U.S. federal judge blocked DOE.
  • Countries such as China and Kazakhstan have restricted crypto mining due to concerns surrounding power grid strain and emissions targets. This has prompted some miners to seek safe havens in other countries.

The Ethiopian connection.

Some countries, like Ethiopia, will become attractive destinations for cryptocurrency mining, offering favorable investment opportunities through access to inexpensive electricity. The Ethiopian state-run power monopoly recently announced that it has signed power supply deals with 21 Bitcoin mining firms, 19 of which are from China.

  • Ethiopia is somewhat unique in that it has excess clean energy from its hydroelectric dams. Yet others, such as Kenya, which has underutilized geothermal potential, may soon face similar tradeoffs.
  • Drawing crypto miners could attract investment into the power sector and boost foreign currency inflows.
  • But new electricity generation could also be funneled to bolster domestic industry and to expand access for the population.

One unambiguous outcome → Shining a new spotlight on global energy inequality.

In 2022, Bitcoin mining’s electricity consumption of 96 TWh was higher than what Bangladesh, a nation home to 170 million people, used — and more than Nigeria, Kenya, and Ethiopia combined. Here’s how Bitcoin compares to select countries: