Please note!

This fact brief was originally published as an experiment to test the concepts behind fact briefs.

Readers should be aware that while there is still a lot of useful information in fact briefs like this one, not all of them reflect Gigafact's current methods and standards for fact briefs. If you come across any that you feel are out of date, don't hesitate to contact us at support@gigafact.org.

FACT BRIEF

Are most cryptocurrency operations powered by electricity from non-renewable sources?

Saturday, May 15, 2021

By Austin Tannenbaum

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YES

Non-renewable energy powers most of the computer processing that supports the circulation of cryptocurrencies, digital money using encrypted transaction data.

Cambridge’s Center for Alternative Finance estimates that in 2020, 39% of the “cryptoasset industry” was fueled by renewable energy, most of which is hydroelectric.

Electricity to power computers is the main cost of cryptocurrency “mining” operations that support the systems. Miners of Bitcoin, for instance, verify groups of Bitcoin transactions called “blocks” on a digital ledger called the “blockchain.” To encrypt a block, miners must convert the data into a code called a “hash.” Generating a suitable hash involves trial and error by powerful, energy-intensive computers; the first miner to generate a suitable hash for each block is rewarded with Bitcoin. The network attempts to produce one block every 10 minutes.

This fact brief is responsive to conversations such as this one.

Sources

University of Cambridge Judge Business School: Third global cryptoasset benchmarking study

Investopedia How does Bitcoin mining work?

Cambridge Center for Alternative Finance Cambridge Bitcoin Electricity Consumption Index: Comparisons

ABOUT THE CONTRIBUTOR

Gigafact

Between 2020 and 2022, under close editorial supervision, Gigafact contracted a group of freelance writers and editors to test the concepts for fact briefs and provide inputs to our software development process. We call this effort Gigafact Foundry. Over the course of these two years, Gigafact Foundry writers published over 1500 fact briefs in response to claims they found online. Their important work forms the basis of Gigafact formats and editorial guidelines, and is available to the public on Gigafact.org. Readers should be aware that while there is still a lot of relevant information to be found, not all fact briefs produced by Gigafact Foundry reflect Gigafact's current methods and standards for fact briefs. If you come across any that you feel are out of date and need to be looked at with fresh eyes, don't hesitate to contact us at support@gigafact.org.

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About fact briefs published on Gigafact

Fact briefs are short, credibly sourced summaries that offer “yes/no” answers in response to claims found online. They rely on publicly available, often primary source data and documents. Fact briefs are created by contributors to Gigafact —a nonprofit project looking to expand participation in fact-checking and protect the democratic process. See all fact briefs here.