The amount of electricity used to mine bitcoin has dropped sharply in recent months

The electricity consumption of the bitcoin network has fallen by a third from its high of 11 June, down to an annualised 131 terawatt-hours a year, according to estimates from the crypto analyst Digiconomist. That still equates to the annual consumption of Argentina, with a single conventional bitcoin transaction using the same amount of electricity that a typical US household would use over 50 days. The decrease in electricity used for Ethereum, the “programmable money” that underpins much of the recent explosion in crypto projects, has been sharper still, down from a peak of 94TWh a year to 46TWh a year – the annualised consumption of Qatar. The underlying reason for the fall is the same for both currencies, however. The electricity consumption of a cryptocurrency network comes from “mining”, which involves people using purpose-built computers to generate digital lottery tickets that can reward cryptocurrency payouts. The process underpins the security of the networks, but incentivises the network as a whole to waste extraordinary amounts of energy