A new report shows the mining of bitcoin uses more electricity than several entire nations. 

The amount of energy used to mine the cryptocurrency has skyrocketed over the last year, as has its price. 

Mining bitcoins requires dedicating computer processors to solving complex maths problems. Computers are used to work on algorithms in order to verify transactions. When they solve a calculation, the miner is rewarded with a fraction of bitcoin.

With recent rises in the value of cryptocurrencies, more and more computers are being dedicated to mining bitcoin.

This means the energy used to mine the coins has soared, according to an analysis published by Cambridge University.

“Rising bitcoin prices make mining more attractive, as the potential reward increases in value. As a result, new mining hardware will get added to the network and lead to increasing electricity consumption overall,” the new report says.

Bitcoin’s annual carbon footprint is now equivalent to or more than several entire countries, including Argentina and Norway.

Cambridge researchers say bitcoin mining activities consume around 121.36 terawatt-hours (TWh) per year. 

That puts the annual electricity consumption above Argentina (121 TWh), the Netherlands (108.8 TWh) and the United Arab Emirates (113.20 TWh) - and just below Norway (122.20 TWh).

Some have suggested a carbon tax be placed on cryptocurrencies to balance out some of the negative consumption

“Bitcoin is literally anti-efficient,” says David Gerard, a writer and clockahin expert.

“So more efficient mining hardware won't help - it'll just be competing against other efficient mining hardware.

“This means that Bitcoin's energy use, and hence its CO2 production, only spirals outwards.

“It’s very bad that all this energy is being literally wasted in a lottery.”

China has become a world leader in bitcoin mining, according to the report.

As the nation predominantly relies on fossil fuels, the report says its carbon contribution is growing too. 

“Chinese pools have dominated bitcoin mining in recent years, among others because of their relatively low fee structure which has attracted numerous non-Chinese hashers,” according to the report.

A live tracker of bitcoin’s energy use is accessible here.