How Bad is Crypto for the Environment?

A new study from Cambridge University says that Bitcoin could consume more energy than the entire world by 2020.

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Bitcoin and other digital currencies are often criticized for the amount of energy that goes into their production – so just how bad is crypto for the environment?

The process of mining Bitcoin and other digital currencies consumes a lot of energy – some estimates put the figure at around 20% of the global total. This has led to criticism that crypto is bad for the environment.

However, it’s important to put this figure into context. The world’s total energy consumption is around 500 terawatt-hours (TWh) per year. Bitcoin’s annual energy consumption is estimated to be around 50 TWh. So while Bitcoin mining is a significant contributor to global energy consumption, it’s still only a small fraction of the total.

It’s also worth noting that the majority of Bitcoin mining takes place in China, where coal-fired power stations are the norm. This means that the carbon footprint of Bitcoin is likely to be higher than it would be if mining was taking place in countries with cleaner energy sources.

Despite these concerns, it’s important to remember that crypto mining is only temporary. Once all 21 million Bitcoins have been mined, the mining process will stop. So while crypto might have a negative impact on the environment in the short term, in the long term it will have no impact at all.

Bitcoin ‘mining’ consumes more electricity than entire countries

The amount of electricity consumed by Bitcoin “mining” has surpassed the annual energy usage of entire countries, according to new research.

Bitcoin mining – the process in which new Bitcoin are created and transactions are verified on the Blockchain – consumes vast amounts of energy. And according to new research, it now uses more electricity than 159 individual countries (including Ireland, Thailand, and Uruguay).

The research, conducted by Digiconomist, found that Bitcoin mining currently consumes around 77.78 terawatt-hours (TWh) of electricity a year. That’s more than the annual energy usage of Hungary (53 TWh), Oman (48.8 TWh), or Qatar (45.8 TWh).

Even more alarmingly, the research suggests that Bitcoin mining could consume as much as 0.5% of the world’s total electricity by the end of 2018. If that happens, it would use more electricity than the entire United States currently uses on an annual basis.

So why is Bitcoin mining so energy-intensive?

The short answer is that it takes a lot of computing power to verify transactions on the Blockchain – and that requires a lot of electricity to power the computers doing the verification.

To give you an idea of just how much computing power is needed, each Bitcoin transaction requires around 1,000 times more computational power than a standard Visa transaction.

The carbon footprint of Bitcoin is huge

Bitcoin and other cryptocurrencies have a huge carbon footprint. The carbon footprint of Bitcoin is estimated to be about 32 metric tons, which is more than the carbon footprint of all of Switzerland. The majority of Bitcoin’s carbon footprint comes from the electricity used to power the computers that mine Bitcoin.

Cryptocurrencies are also bad for the environment because they use a lot of energy and they are often not recycled. For example, when you mine Bitcoin, you use a lot of energy to power the computers that do the mining. This energy often comes from coal-fired power plants, which produce a lot of greenhouse gases.

Other digital currencies are not much better

At the end of 2017, there were more than 1,500 cryptocurrencies in existence, with a total market value of over $600 billion. Bitcoin, the original and most well-known cryptocurrency, accounted for more than half of that market share. As the price of Bitcoin and other digital currencies has soared, so too has the level of energy required to mine them.

Mining is the process by which new cryptocurrency coins are created. Miners use computers to solve complex math problems, and in return they are rewarded with new coins. The more coins a miner can generate, the more profit they can make. The problem is that each new math problem becomes progressively more difficult to solve, requiring greater computing power. As a result, miners have had to invest in ever-more powerful machines to keep up with the competition.

This has led to an explosion in global energy consumption by cryptocurrency miners. Estimates suggest that Bitcoin mining alone consumes as much electricity as the entire country of Denmark. And other digital currencies are not much better. Ethereum, the second largest cryptocurrency by market value, is estimated to consume about as much electricity as all of Qatar.

The vast majority of this energy consumption is coming from coal-fired power plants in China, which produce some of the dirtiest electricity on Earth. So even as digital currencies like Bitcoin promise to revolutionize finance and cut down on carbon emissions by making transactions more efficient, their current level of energy consumption is anything but sustainable.

What can be done to make digital currencies more eco-friendly?

Some experts have argued that digital currencies are bad for the environment because of the enormous amount of energy that is required to mine them. Bitcoin, for example, is estimated to use about as much energy as the entire country of Ireland.

There are a number of ways that the crypto industry could make digital currencies more eco-friendly. One way would be to move away from proof-of-work mining, which is the energy intensive process that is used to mine most digital currencies. Instead, some cryptocurrencies are moving towards proof-of-stake, which does not require nearly as much energy.

Another way to make digital currencies more eco-friendly would be to use green energy sources to power mining operations. This is already starting to happen in some parts of the world, with companies like Greenidge Generation using excess hydroelectric power to mine Bitcoin.

Ultimately, it will be up to the crypto industry to decide how they want to address their environmental impact. However, it is clear that there is a need for action if digital currencies are going to be more sustainable in the future.