Is Bitcoin Bad for the Environment?
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Energy costs of mining
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Environmental impacts of mining
Over the past few years, Bitcoin, Etherium, and other cryptocurrencies have seen massive growth in prices and users. While the legitimacy of cryptocurrencies being true currencies is still a hotly debated topic, what is clear is the negative impact of crypto mining. In simpler terms, mining refers to the process by which new bitcoins are entered into circulation. It is also a vital component of the maintenance and development of the blockchain ledger. The specialized computers that perform crypto mining require immense energy to compute the complex mathematical problems required.
Energy Costs of Mining
So, just how costly are the energy requirements for these computers? According to the BBC, Bitcoin requires 121 Terawatt-hours of electricity a year! To put that into perspective, that is more energy consumed than the entire country of Argentina. The energy consumption use of Bitcoin is comparable to other countries such as Norway and Ukraine.
In addition, as the prices of cryptocurrencies increase, the mathematical problems used to create the blocks also increase in complexity. This means those specialized computers will have to consume more energy to process the same number of transactions.
Environmental Impacts of Mining
Most of the mining for bitcoin takes place in China, around 50% as of April 2021. For miners in China, coal is the primary fuel source used for most of the year — save for the summer months when hydropower is used due to the rainy season. And as we all know, coal is one of the dirtiest fossil fuels still used today.
The total amount of carbon dioxide released from bitcoin production is estimated to be around 37 million metric tons a year. That amount is comparable to a small country like New Zealand. Other environmental impacts of Bitcoin mining also hit close to home for those in Upstate New York. For residents of Seneca Lake, bitcoin mining has been attributed to the lake feeling uncomfortably warm. Lake water is being drawn in to cool a Greenidge Generation power plant that powers 8,000 mining computers to cool and is then discharged back into the lake.
As bitcoin and other cryptocurrencies continue to surge in popularity, the specialized computers used to mine bitcoin will require more energy, which will release more and more carbon dioxide into the atmosphere. Given the latest IPCC report, we are running out of time to fight climate change. If we do not switch to using a majority of renewable energy for bitcoin and other operations, we will push ourselves closer and closer to disaster.
At Physis, we believe that you have the power to make an impact. That is why, through our innovative platform, we make it easy to understand what are the impacts of your investments. Through our sustainable products report feature, you can see what the companies in your portfolio are producing that are sustainable. Our platform also allows you to see which companies in your portfolio align with the UN SDGs. Be a part of the change today by joining us.
Sources:
How Does Bitcoin Mining Work? What Is Crypto Mining?
Bitcoin consumes ‘more energy than Argentina’
Bitcoin mining by country 2021
Bitcoin’s wild ride renews worries about its massive carbon footprint