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Yesterday, I received via email a report that takes an original look at Bitcoin’s energy consumption. The study, from UK financial site MoneySuperMarket calculates the electricity cost of each Bitcoin transaction. If you buy a latte with Bitcoin, or send coins to friend for walking your dog, how much juice does the purchase or transfer consume? The answer is a blow to those fans who insist that Bitcoin will someday serve as a widespread currency that makes buying and selling things faster and cheaper.

The report states that each Bitcoin transaction consumes 1,173 kilowatt hours of electricity. That’s the volume of energy that could “power the typical American home for six weeks,” the authors add. The Bitcoin mining that enables a purchase, sale or transfer, it posits, uses a slug of electricity that costs $176. That number is based on an average worldwide cost per kWh of 9.0 cents over the past 12 months.

While the revelation that Bitcoin network devours $100-plus in electricity for a transaction that a credit card company could power for pennies is shocking, the $176 estimate appears much too high. The problem, says Alex de Vries, the Dutch economist whose website Digiconomist tracks Bitcoin’s carbon footprint, is the 9 cents mark for electricity costs. “I estimate that the average for Bitcoin miners is 5 cents,” he says. “And that’s a high number. Many are producing in super-low cost countries at 3 or 4 cents.” A figure of 9 cents per kWh would also put the electricity bill for minting each Bitcoin at $35,000. From this writer’s experience, the actual expense is far less. From late October of 2020 to mid-January of this year, Bitcoin was trading between $11,000 to $35,000, yet miners were still avidly powering their racks of ASIC computers to win more coins. Mines would have been shutting down if they’d been faced with paying more in electricity to make their product than they could sell it for.

So let’s reduce the MoneySuperMarket number from 9 cents per kWh to the 5 cents favored by de Vries. That would put the average cost of producing a coin at around $19,000, which looks reasonable (and underscores the industry’s gigantic profitability as price hovers at over three times that level). At 5 cents, the electricity cost per transaction would fall from $176 to roughly $100.

The stunning amount of electricity Bitcoin gobbles for just one transaction, and the cost of that power, raises a basic question. Is creating a “currency” by consuming all that energy a sound business model? Bitcoin’s drawback is that electricity is finite, and what Bitcoin uses, a family or a business can’t use. In several nations, Bitcoin mining is imposing severe stress on the grid. Kazakhstan, one of world’s leading crypto mining hubs and a top destination for producers displaced by the Chinese lockdown, is suffering blackouts caused by the industry’s sudden explosion within its borders. Its government is limiting producers to a fraction of the electricity they’re now deploying. Iran has also suffered severe shortages that’s led to ejecting producers, and tiny Abkhazia is raiding mines––many of them illegal––to forestall an energy crisis. El Salvador promises to subsidize newcomers that decamp there, even though it imports 30% of its electricity. Since its grid is operating at full capacity, an influx of miners would force the government to import more juice, at a higher price than the electricity it generates at home using its geothermal energy fed by volcanoes.

“The miners leaving these countries will need to move to other countries, then they’ll destabilize the grid in the new countries,” says de Vries. “We’re looking at a rolling disaster.” The biggest threat to Bitcoin, he says, may not be its carbon footprint but its burden in overloading electrical grids around the world. As houses go dark and factories shutter, governments will leap into action, banning or severely curtailing mining. Bitcoin doesn’t need Halloween to spring more ghoulish surprises like the new one in Kazakhstan. There’s lots of talk about whether Bitcoin is “sustainable.” The bigger question is whether a business template that gets you booted from countries for taking power needed by families and businesses is sustainable.