Is the Environmental Stigma Associated with Bitcoin Mining Warrented?

Bitcoin is probably the most notoriously known form of cryptocurrency worldwide. It offers anonymity and can't be interfered with from banks and governments. However, the process in which Bitcoins are generated is similar to the way that we mine gold. Bitcoins are mined. The way in which they are "mined" is not your traditional hop in a cave and dig method. Bitcoin transactions are stored in blocks in a chain that is kept by a network of peers. Mining involves solving complex mathematical problems. Miners compete against each other in this network to solve these mathematical puzzles. The winners of these puzzles earn the right to add a block to the chain and also are rewarded with Bitcoin. Struggling to see where the environmental effects come from this? Well look no further.

As you can see from this plot, Ireland's total electricity usage is less than half of the electricity that is used by Bitcoin in 2019. According to Forbes if Bitcoin was to be its own country, it would be the most 41st most electricity-demanding nation. Bitcoin relies on an estiamted 61.76 terrawatt-hours (TWh). This is approximately 0.28% of global electricity consumption, and more than most countries in the world. (McCarthy. N, 2020)

Why is the consumption so high? Well the way that the mathematical puzzles are solved it requires a lot of computer processing power. The result of this is the computers require a lot of energy and electricity. There's also a lot of electricity required to keep these computers at a cool temperature. Failure to do so can cause the motherboards to fry and the whole system to go up in smoke, not ideal.

What appears to becoming a popular trend is that Bitcoin mining centers are being developed in areas where electricity and energy does not cost that much or is free. For example in China there are some areas that provide free hydroelectric power to its residents. Also in Iceland, the island of a mere 370,000 people has seen a rise in Bitcoin mining centers popping up due to the inexpenisve energy available there. However, in the case of Iceland the rise of Bitcoin mining has shown a demand of electricity that is greater than the electricity used to power homes in the country itself. Likewise in China, Bitcoin mining centers are popping up in areas that use non-renewable forms of energy, such as fossil fuels. These are the areas in which Bitcoin mining is having the largest negative effect. The higher demand of electricity required to mine Bitcoin results in more fossil fuels being burned up and thus DAMAGE TO OUR ATMOSPHERE!!!!

(Perry. P, 2020)

In 2018, an analysis was done on the full mining process, from the production of the raw materials needed, the actual mining process and the recycling after. What the analysis found is that the use of the mining equipment contributed to 99% of the environmental impact Bitcoin has on the planet. Researchers believe the main issue is that Miners that are operating out of areas with non-renewable energy sources are the cause for concern. If Miners were to focus mining in locations where renewable energy sources were available the impact that Bitcoin mining would have would be greatly reduced. The number of miners is only set to increase. What does this mean for environment only time will tell.

(American Chemical Society, 2020)

Thanks, again for tuning in! If you enjoyed this blog there are plenty of other interesting blogs posted by the Green Guys. Why not stay around and ponder about what technology has in store for the environment?

References:

[1] American Chemical Society, 2020.Estimating The Environmental Impact Of Bitcoin Mining. [online] Phys.org. Available at: <https://phys.org/news/2019-11-environmental-impact-bitcoin.html> [Accessed 26th March 2020].

[2] McCarthy, N., 2020.Bitcoin Devours More Electricity Than Switzerland [Infographic]. [online] Forbes. Available at: <https://www.forbes.com/sites/niallmccarthy/2019/07/08/bitcoin-devours-more-electricity-than-switzerland-infographic/#51c0ef0b21c0> [Accessed 26th March 2020].

[3] Perry, P., 2020.Bitcoin Mining: What Is It? Why Does It Consume So Much Energy?. [online] Big Think. Available at: <https://bigthink.com/philip-perry/what-is-bitcoin-mining-and-why-does-it-require-so-much-electricity> [Accessed 26th March 2020].