The Carbon Footprints left by Cryptocurrency (Bitcoin) Mining, how bad is it?
By Patience Asanga
Last month, a giant automobile company, Tesla, revoked the use of Bitcoin, the biggest cryptocurrency in circulation, for the purchase of its vehicles because of its impacts on the environment. In a tweet made by Tesla’s CEO, Elon Reeve Musk, using his verified Twitter handle, the company expressed its concern over the increasing use of coal for bitcoin mining and transactions. Coal is known to emit greenhouse gases that contribute to global warming.
Cryptocurrency is decentralized digital money that is based in a distributed database known as Blockchain. This database stores data across multiple computers but appears to the user as though it is a single site. Although blockchain technology is used in other industries like banking, medical science, during elections etc, it is more popular in the world of cryptocurrency.
Blockchain is a method of keeping records in a way that cannot be tampered with by anyone. This method of record-keeping also supports a design that can be managed and modified by the public. The process of protecting this database against cyberattacks is called Mining.
Thus, mining involves the use of cryptography to maintain the security of a blockchain; more like building a wall around it to keep it safe. Because blockchain is open to the public, anybody with an incredible ability at solving mathematical puzzles is involved in the fortification of these walls. The higher the number of cryptographers securing a blockchain the harder it is to crack. These cryptographers are rewarded with digital currencies like bitcoin for their job.
Therefore, Bitcoins are rewards for computing complicated mathematical calculations in record time, 10 minutes to be precise. The addition of records (blocks) to the database triggers the system to create new units of this coin, which is awarded to the first miner to compute it. The reward issued to Bitcoin miners is one of the factors that increase the value of bitcoin in the global market.
Admittedly, Bitcoin is the first cryptocurrency in the world. It appeared in the global market in 2008 and entered into circulation in 2010 at a value of $0.07. Fast forward to 2021, there are over 1200 cryptocurrencies in circulation with a market value of over $2 trillion. Bitcoin has more than 68% of the total market cap of all cryptocurrencies. This booming market is not only a cause of concern to governmental organizations who believe that cryptocurrencies are used for money laundering and other fraudulent activities but also environmentalists who are concerned about the impact of its high energy consumption on the environment.
Bitcoin miners use heavy computer hardware that consumes large amounts of energy for their computations. Ordinarily, PCs ought to be able to mine bitcoins, but in order to boost power and efficiency, miners employ hardware like graphic processing units, Application-specific Integrated circuit (ASIC) miners, field-programmable gate arrays (FPGA), etc to mine bitcoins.
Currently, ASIC miner, which is the most energy-efficient chip in the market today, does not entirely solve the problem of huge energy consumption. ASIC miner utilizes 72000 GW of power to mine one Bitcoin. In 2017, a group of researchers discovered that the energy consumed by bitcoin mining surpasses the energy consumed by 175 countries including 20 European countries. They also stated that if Bitcoin were a country, it would rank 50th in the world in terms of energy consumption.
Generally, Carbon Dioxide gas (CO2) is a major greenhouse gas that causes global warming. It is primarily emitted during the burning of fossil fuels for energy. The report has it that the amount of CO2 in the environment today is higher than it has ever been in the past 800 years. As a result of these inhibited emissions into the environment, sea levels are rising, the oceans are becoming more acidic; animals and plants that are unable to adapt to this new normal are already doomed for extinction.
However, Narayanan also stated in his testimony that if the price of a cryptocurrency goes up, more energy will be used in mining it; if it goes down, less energy will be used. With this, we can say that every dip in the value of Bitcoin is a big relief to the environment. But because the value is always fluctuating, this scenario offers little or no help to resolving the problem of global warming.
Notwithstanding, most persons argue that the adverse effect of Bitcoin mining on the environment is compensated for with its contribution to society in terms of wealth creation. The ball now lies between following this school of thought and making difficult but ethical decisions like Tesla for the betterment of our environment.
If we go by the former, then the next human generations to come might just have to learn to breathe underwater.
If Bitcoin were a country, it would rank 50th in the world in terms of energy consumption
Cryptocurrency is decentralized digital money that is based in a distributed database known as Blockchain. This database stores data across multiple computers but appears to the user as though it is a single site. Although blockchain technology is used in other industries like banking, medical science, during elections etc, it is more popular in the world of cryptocurrency.
Blockchain is a method of keeping records in a way that cannot be tampered with by anyone. This method of record-keeping also supports a design that can be managed and modified by the public. The process of protecting this database against cyberattacks is called Mining.
Thus, mining involves the use of cryptography to maintain the security of a blockchain; more like building a wall around it to keep it safe. Because blockchain is open to the public, anybody with an incredible ability at solving mathematical puzzles is involved in the fortification of these walls. The higher the number of cryptographers securing a blockchain the harder it is to crack. These cryptographers are rewarded with digital currencies like bitcoin for their job.
Therefore, Bitcoins are rewards for computing complicated mathematical calculations in record time, 10 minutes to be precise. The addition of records (blocks) to the database triggers the system to create new units of this coin, which is awarded to the first miner to compute it. The reward issued to Bitcoin miners is one of the factors that increase the value of bitcoin in the global market.
Admittedly, Bitcoin is the first cryptocurrency in the world. It appeared in the global market in 2008 and entered into circulation in 2010 at a value of $0.07. Fast forward to 2021, there are over 1200 cryptocurrencies in circulation with a market value of over $2 trillion. Bitcoin has more than 68% of the total market cap of all cryptocurrencies. This booming market is not only a cause of concern to governmental organizations who believe that cryptocurrencies are used for money laundering and other fraudulent activities but also environmentalists who are concerned about the impact of its high energy consumption on the environment.
Bitcoin miners use heavy computer hardware that consumes large amounts of energy for their computations. Ordinarily, PCs ought to be able to mine bitcoins, but in order to boost power and efficiency, miners employ hardware like graphic processing units, Application-specific Integrated circuit (ASIC) miners, field-programmable gate arrays (FPGA), etc to mine bitcoins.
Energy consumption of Bitcoin Mining
In 2018, Arvind Narayanan, an Associate Professor of Computer Science at Princeton University, United States, testified about blockchain technology and its implication for energy efficiency and cybersecurity. In his written testimony, he said, “I performed [such] a calculation and obtained an estimate of around 5 gigawatts for Bitcoin mining alone today [2018]. This is slightly under 1% of world electricity consumption, or slightly more than the electricity consumption of the state of Ohio or that of the state of New York. Other public blockchains also consume a substantial, albeit much lower, amount of energy.” It takes an enormous amount of energy to mine a single bitcoin.Currently, ASIC miner, which is the most energy-efficient chip in the market today, does not entirely solve the problem of huge energy consumption. ASIC miner utilizes 72000 GW of power to mine one Bitcoin. In 2017, a group of researchers discovered that the energy consumed by bitcoin mining surpasses the energy consumed by 175 countries including 20 European countries. They also stated that if Bitcoin were a country, it would rank 50th in the world in terms of energy consumption.
Cryptocurrency’s carbon footprint
Cryptocurrency carbon footprint refers to the total amount of greenhouse gases emitted by cryptocurrency annually. It is measured in tonnes of carbon dioxide equivalent (CO2e). Based on a study carried out by Alex de Vries of Digiconomists.net, the annual carbon footprint of cryptocurrencies as of 2021 is 56.85 Mt CO2. This can be compared to Portugal’s annual carbon footprint.How does this affect the environment?
It follows that nearly 80% of the world’s energy consumption is through fossil fuels. According to Dr. Chika Amaechi, a lecturer from the Department of Environmental Management and Toxicology at the University of Benin, Nigeria, “fossil fuels contribute to greenhouse gas emissions. If you’re using an appliance that consumes more fuel, in other words, gives out more greenhouse gas, it’s going to emit more greenhouse gas that traps more heat and consequently causes global warming that will cause climate change.”Generally, Carbon Dioxide gas (CO2) is a major greenhouse gas that causes global warming. It is primarily emitted during the burning of fossil fuels for energy. The report has it that the amount of CO2 in the environment today is higher than it has ever been in the past 800 years. As a result of these inhibited emissions into the environment, sea levels are rising, the oceans are becoming more acidic; animals and plants that are unable to adapt to this new normal are already doomed for extinction.
How bad is it?
The major effect of high energy consumption on the environment is global warming. Global warming is the rise in the average temperature of the earth’s atmosphere and oceans. This leads to unfortunate situations like bush fires, a decrease in crop yield, floods that lead to loss of habitats, and a lot more. The continuous burning of fossil fuels to generate power for mining cryptocurrencies, especially Bitcoin, is contributing to this unfortunate incident on a large scale.However, Narayanan also stated in his testimony that if the price of a cryptocurrency goes up, more energy will be used in mining it; if it goes down, less energy will be used. With this, we can say that every dip in the value of Bitcoin is a big relief to the environment. But because the value is always fluctuating, this scenario offers little or no help to resolving the problem of global warming.
Notwithstanding, most persons argue that the adverse effect of Bitcoin mining on the environment is compensated for with its contribution to society in terms of wealth creation. The ball now lies between following this school of thought and making difficult but ethical decisions like Tesla for the betterment of our environment.
If we go by the former, then the next human generations to come might just have to learn to breathe underwater.
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