Sun Sep 19 2021
What's the environmental impact of Bitcoin mining?
The Bitcoin network generates as much e-waste as the Netherlands, and it will consume as much energy as Pakistan.
A new study by researchers from MIT and the Dutch central bank concludes that a single Bitcoin transaction generates e-waste equivalent to throwing two iPhones in the bin.
Published in Science Direct, the study estimates that the whole Bitcoin network generates as much as 30.7 metric kilotons of e-waste every year!
That’s a comparable amount of waste to the amount of small IT and telecommunications equipment waste produced by a country like the Netherlands.
The Bitcoin network processed 112.5 million transactions last year, according to researchers. Doing some quick maths, that means each transaction generated an average 272g of e-waste (the weight of two iPhone 12 minis).
The study estimates that Bitcoin mining could produce as much as 64.4 metric kilotons of e-waste annually, at the peak price levels seen in early 2021.
It’s the mining, the process of generating new Bitcoins, that is contributing to this abundance of e-waste. Mining uses specialised single-purpose computer chips, called application-specific integrated circuit (ASICs). These have no other purpose than to run the algorithms that secure the Bitcoin network.
Generally speaking, each ASIC miner is built to mine a specific digital currency, meaning that a Bitcoin ASIC miner can only mine Bitcoin.
On top of that, the ASICs become obsolete roughly every 1.3 years, according to researchers, so it necessitates replacements, adding to e-waste and general waste.
All of the participating miners in the Bitcoin network compete with each other for the reward of creating a new block for Bitcoin's underlying blockchain. The chance of generating a new block is proportional to the mining machine's share of the total computational power used for mining.
This means that to mine effectively and profitably, miners have to constantly replace their ASICs with newer chips, as a machine that can carry out more computations per unit of energy is considered more profitable.
According to the University of Cambridge Bitcoin Electricity consumption index, Bitcoin mining consumes about 100 Terawatt Hours in a single year, with consumption going up as Bitcoin's value rises.
Bloomberg’s recent report shows that the total power consumed by the Bitcoin network this year has already crossed the 2020 consumption level of around 67 terawatt-hours (TWh). It is expected to consume 91TWh of energy by the end of the year: as much as Pakistan.
This process undeniably has a negative impact on the environment.
In fact, in 2018 a report by Jon Truby, assistant professor of the Centre for Law and Development at Qatar University claims that failing to lower the energy use of such technologies will inhibit some nations from reaching their climate-change obligations laid out in the Paris Agreement.
The report recommended new taxes, charges, or restrictions to reduce demand by users, miners, and mining chip manufacturers who employ polluting technologies, and to offer incentives that encourage developers to create less energy-intensive or carbon-neutral blockchains.
Sun Sep 19 2021