# The Truth About Bitcoin Mining: The Energy Consumption Dilemma Behind 134 Terawatt-Hours

When we talk about Bitcoin mining, a shocking set of numbers comes into view—2021 research data shows that the annual electricity consumption for Bitcoin mining reached 134.89 terawatt-hours. If Bitcoin mining were considered an independent economy, its electricity usage would rank 27th among all countries worldwide, equivalent to Malaysia’s total annual electricity consumption. This is not just a technical issue but also an energy problem, an economic issue, and even a national strategic concern.

Why Has Bitcoin Mining Energy Consumption Multiplied?

To understand why Bitcoin mining consumes so much energy, we need to look at its design mechanism. Satoshi Nakamoto, the creator of Bitcoin, published a white paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System” in 2008, amid the subprime mortgage crisis, aiming to challenge the dominance of the US dollar with electronic currency. In the early days, Nakamoto mined 50 bitcoins using just a home computer, with minimal electricity consumption.

However, Bitcoin’s design rules destined it to become energy-intensive. The total supply of Bitcoin is permanently capped at 21 million coins—a hard limit. Initially, miners received a reward of 50 bitcoins for each valid block found. But after every 210,000 blocks, this reward halves. What does this mean?

Here’s a simple analogy: early on, one computer could mine one bitcoin in a day; later, two computers would take two days; then four computers, four days. This is not linear growth but exponential difficulty increase. As more participants join, mining difficulty rises continuously, and the required computational power grows exponentially. From CPU mining to GPU computing, and now to specialized mining hardware—this evolution is essentially a hardware arms race.

Currently, a single mining machine consumes about 35 kWh of electricity, and a large-scale mining farm’s daily power consumption can meet the annual electricity needs of an average person. This does not include cooling systems—fans and other equipment are necessary to dissipate the heat generated during high-speed calculations; otherwise, the entire farm would overheat and shut down.

This process will continue until 2140, when all 21 million bitcoins are mined. Thirteen years have already consumed such enormous amounts of electricity—imagine what the future holds. To survive in this competitive environment, miners must constantly upgrade their equipment, acquire more computing power, and outpace others. This creates a vicious cycle that cannot be stopped.

The True Value of Bitcoin from the Perspective of Labor Theory of Value

What is the real value of the bitcoins mined at great cost by miners? This question requires understanding the background of Bitcoin’s creation.

In 2008, amid the global financial crisis, the Federal Reserve launched quantitative easing, leading to massive dollar issuance and devaluation. Against this backdrop, Nakamoto introduced Bitcoin, hoping to create a form of electronic currency outside central bank control. The idea was ambitious, but reality proved harsh.

In the early days, Bitcoin circulated quietly among programmers, with very low visibility and almost no value. There’s a story of a programmer who exchanged 1,000 bitcoins for two pizzas—this story is still told in crypto circles. Over time, tech enthusiasts in the geek community began to be attracted by Bitcoin’s decentralization, and with their promotion, Bitcoin gradually gained recognition. Especially in the dark web, Bitcoin’s anonymity made it a virtual “dollar.”

The increased recognition drove prices up—from a few cents to $3,000, and in 2020, during the Fed’s again “money printing” wave (with 21% of the total dollar supply issued in 2020 alone), Bitcoin’s price surged past $68,000. The numbers are staggering, but the question remains—what actual product or service has Bitcoin created?

From the perspective of the labor theory of value, Bitcoin’s value should be considered “zero.” First, society did not need Bitcoin before its creation; it was not a necessity. Second, the labor involved in mining cannot be measured by traditional economics. Third, Bitcoin has never truly entered the mainstream circulation of goods; it has always been outside the real economy.

So why is Bitcoin worth so much money? The only explanation is speculation and bubbles. If Bitcoin has any value, it is only due to its decentralization, anonymity, and difficulty of loss—its technical attributes. But these features do not support it becoming a true circulating currency—once Bitcoin reverts to its original monetary role, it will inevitably face being squeezed out by mainstream currencies.

Deep Reasons Behind China’s Crackdown on Bitcoin Mining

In mid-2021, the central bank and related authorities issued notices, summoning major financial institutions and reaffirming the need to crack down on speculation in cryptocurrencies like Bitcoin. This is not a momentary emotional policy but a strategic decision made after careful consideration.

Energy resource considerations are the primary factor. Before May 2021, nearly 70% of global Bitcoin mining farms were located in China. Miners flocked to regions like Yunnan, Guizhou, and Sichuan during the rainy season to buy cheap hydropower, then moved to Inner Mongolia and Xinjiang during dry seasons to purchase cheap thermal power. It is predicted that by 2024, China’s annual Bitcoin mining energy consumption will be equivalent to the annual output of three and a half Three Gorges Dam hydroelectric stations. What does this mean? Valuable energy resources are being used for meaningless calculations, while electricity that should serve the real economy and people’s livelihoods is being diverted on a large scale. This poses a direct threat to domestic economic development.

The black industry chain is another reason. Although Bitcoin’s anonymity is promoted as “privacy protection,” its real applications are mostly involved in illegal activities—money laundering, drug trafficking, fraud, and other black industries all use Bitcoin as an ideal tool. Cutting off the dissemination chain of Bitcoin is equivalent to cutting off the flow of funds for these crimes.

Sovereign currency security is the third and most crucial reason. In today’s turbulent global economy, uncontrolled virtual currencies could become a ticking time bomb for the financial system. A notable example is El Salvador—this Central American country in September 2021 became the first to adopt Bitcoin as legal tender, attracting international attention. But what happened afterward? The subsequent Bitcoin bear market caused El Salvador to lose hundreds of millions of dollars, putting its finances at risk. Some analysts even suggest it could become the first country to go bankrupt due to “speculative currency.”

If Bitcoin mining continues unchecked domestically, it will not only consume enormous energy, foster crime, and erode social morals (since crypto speculation is akin to gambling and can weaken a nation’s work ethic), but also lay hidden financial risks. Confronted with these challenges, cracking down on Bitcoin mining is an inevitable choice for energy strategy, financial security, and social stability.

In summary: Bitcoin mining essentially uses real electricity resources, produces genuine pollution and waste, to support a virtual bubble with no tangible value. Such “mining” should be stopped.