In the first few months of 2024, Bitcoin miners in the United States incurred a substantial financial outlay for electricity, totaling approximately $2.7 billion. This spending underscores the significant energy demands of cryptocurrency mining and its economic implications.
Paul Hoffman, an analyst at Best Brokers, provided detailed statistics on the energy consumption patterns observed in the U.S. Bitcoin mining sector since the start of 2024. Hoffman noted, “Since the beginning of the year, Bitcoin mining in the U.S. has used a staggering 20,822.62 gigawatt-hours (GWh) of electric power.” Given the average commercial electricity rate of $0.1281 per kilowatt-hour (kWh) as of February, this usage translates into an expenditure of approximately $2.67 billion.
Energy Usage Equivalence
To put this figure into perspective, Hoffman explained the massive scale of energy consumption: “This amount of energy could charge every electric vehicle in the U.S. 87.52 times or power 1,983,107 households for a year, which represents 1.51% of all U.S. households.”
As of 2024, Bitcoin miners globally have extracted 116,550 BTC, valued at around $8.2 billion. U.S. miners have contributed significantly, accounting for 44,102 BTC or 37.84% of the total mined globally.
Pre and Post-Halving Energy Costs
The energy required to mine a single Bitcoin has also seen a dramatic increase following the April halving event. Before this event, mining one Bitcoin required 407,059.01 kWh, at a cost of approximately $52,144.26. Post-halving, this has escalated to 862,635.55 kWh per Bitcoin, costing about $110,503.61, based on average rates.
Despite the high energy usage, Bitcoin mining is leading as a primarily green industry. According to the January Bitcoin ESG Forecast, the use of sustainable energy in mining has reached a new high of 54.5%, with an overall increase of 3.6% in 2023.
Shift to Greener Solutions
Following the mining bans in China and Kazakhstan, there has been a significant shift of mining operations to North America and other regions with greener energy sources or sustainable off-grid sites.
Currently, about 19.5 million Bitcoin has been mined out of a total possible supply of 21 million, highlighting the nearing cap and its potential impact on mining economics and cryptocurrency valuations.
| Description | Quantity | Cost or Value |
|---|---|---|
| Total BTC Mined Globally | 116,550 BTC | $8.2 billion |
| BTC Mined by US Miners | 44,102 BTC | 37.84% of Total |
| Energy Use Pre-Halving (per BTC) | 407,059.01 kWh | $52,144.26 |
| Energy Use Post-Halving (per BTC) | 862,635.55 kWh | $110,503.61 |
| Total Energy Consumption (US, 2024) | 20,822.62 GWh | $2.67 billion |
The significant expenditure on electricity for Bitcoin mining in the United States reflects both the industry’s massive energy requirements and its ongoing shift towards sustainability. As Bitcoin approaches its mining cap, the focus on greener energy sources is likely to intensify, posing both challenges and opportunities for the industry.
Featured image credit: Marco Verch via ccnull