- As Bitcoin’s popularity touches new heights, it has raised concerns among environmentalists about its environmental impacts.
- The cryptocurrency consumes about 707 kwH per transaction, which is more than the total electricity consumed by Argentina in a year.
- Moreover, it generates huge quantities of e-waste.
In last few years, Bitcoin, the first and the largest cryptocurrency in the world, has seen tremendous growth, both in its prices as well as in its user base.
However, amid its rising popularity, numerous skeptics and environmentalists have raised eyebrows over its environmental impact and energy consumption.
Source: Copyright © 2021 Kalkine Media
Hence, to understand the environmental implications of Bitcoin, we need to understand its working, i.e., its mining process.
Know the working of Bitcoin
When Bitcoin was created in 2008, its creator, with a pseudo name of Satoshi Nakamoto, had rounded off the number of Bitcoins to go up to 21 million.
As of September 2021, nearly 18.8 million Bitcoins are in circulation, with an expectation of releasing the remaining coins by 2140.
Here, it is pointed out that new Bitcoins are created through the Bitcoin mining process, which is nothing but a process involving the validation and recording of new transactions in the blockchain.
Miners must validate numerous Bitcoin transactions, which are clubbed together in a block and whosoever achieves this first is incentivised with a new Bitcoin.
In other words, this mining process involves miners getting into a computational race by solving various crypto puzzles mark, thereby recording new blocks.
The winning miner is not just rewarded with a newly minted Bitcoin, but also transaction fees which are paid by the sender.
Bitcoin devouring huge amounts of energy from non-renewable sources
Now, overall, this mining process makes use of hundreds of thousands or more high-powered computers, which consume huge amounts of electricity, which is mostly derived by the consumption of non-renewable energy sources like coal, etc.
Bitcoin and its environmental impacts
According to estimates, Bitcoin consumes nearly 707 kwH per transaction. Moreover, to keep themselves cool owing to the heat generated, computers consume additional energy.
As per a report released by the University of Cambridge, on average, Bitcoin mining eats up 121.36 terawatt-hours per year, which is more than the combined total consumption of Google, Facebook, Apple, and Microsoft as well as more than the entire electricity consumption of Argentina.
Did you know about the e-waste generated by Bitcoin?
Apart from the energy consumption problem, Bitcoin also produces a considerable amount of electronic waste. This is so because its mining is done on single-purpose, specialised hardware, which becomes redundant nearly every 1.5 years.
As per estimates, as of September 2021, the annual total electronic waste amounts to 23.26 kt, which is like a small IT equipment waste of Holland.
Moreover, an average e-waste per Bitcoin transaction is calculated at 253.20 grams, which is parallel to the weight of 0.52 iPads or 1.54 iPhones.
As the Bitcoin network has ploughed in millions of dollars on its infrastructure and systems, it would be too arduous for it to move to a more sustainable system, i.e., renewable sources of energy.
However, the process might be slow, but not impossible to achieve. Hence, it is the need of the hour to build sustainable projects to reduce Bitcoin’s carbon footprint.