Concerns about the impact of proof of work (POW) and bitcoin (BTC) mining on the environment are growing. As interest in cryptocurrencies expands, there is an increase in energy consumption.
The energy consumption of the Bitcoin network made waves at the end of 2017. Even mainstream news outlets were reporting that it uses more electricity than the entire country of Ireland.
At the time, the network consumed an estimated consume over 30 terawatt-hours (TWh) a year. This is less than its current consumption of 95.45 TWh, according to Digiconomist.
The index explains that the yearly impact of bitcoin is 45.34 metric tons (mt) of CO2. This is comparable to Hong Kong. The coin’s 10.97 kt of e-waste is similar to that of Luxembourg.
However, a 2020 study speculates that they may be underestimated. Rather, the researchers estimate bitcoin energy consumption accounts for “close to half of the current global data center electricity use.”
In China, researchers found that mining could even threaten carbon emission reduction targets.
The environmental impact of mining hardware
In addition to the consumption of electricity, mining hardware is a contribtor to the global e-waste problem.
Bitcoin mining began using simple GPU and CPUs. As the need for power grew, producers began creating unique chips.
Now, bulk mining uses Application-Specific Integrated Circuits (ASICs). They are specifically for mining cryptocurrencies on the POW algorithm.
Cryptocurrency mining is a highly competitive space. Only the most efficient machines operate at a profit. Mining ASICs are being constantly improved. As a result, each new generation introduced to the market means older machines become unprofitable.
The set number of coins and blocks motivates this constant improvement. As more efficient machines join the blockchain the total hashrate of the blockchain also increases.
The quantity of bitcoins that any given miner obtains is largely dependent on the portion of the hashrate generated. This makes older machines generate less profit while still consuming the same amount of power.
As a consequence, bitcoin miners buy an incredible quantity of computing devices. Which they cannot repurpose after they lose their edge.
Renewable energy usage in mining
As explained, crypto mining consumes a lot of energy. This is because bitcoin mining computers need electricity to run.
While this could have been a handful of miners at one point, the mining industry has grown with warehouses filled with machines constantly working.
As a result, if this system ran solely on electricity fuelled by fossil fuels it would be clear that it is detrimental to our diminishing resources.
However, exactly how much mining uses old-school electricity sources or renewable energy is up for debate.
A 2019 mining whitepaper by crypto research firm CoinShares found that 74.1% of bitcoin mining is powered by renewable energy. This is their conservative estimate.
This is forward-thinking…