Over the last years, Bitcoin has risen from being a fringe technology to become the world’s biggest and most popular cryptocurrency, paving the way for other coins such as Ethereum, Tron, Tether USDT etc.
While the advent of Bitcoin amongst other cryptocurrencies has reimagined money, made people millions and also revolutionized decentralized technology, it has also brought with it some unwanted side effects in which cogent of it is its unsustainable energy consumption.
What is The Environmental Impact Of Bitcoin?
To understand the environmental impact of Bitcoin, we must first have an idea of how new coins are created.
Since cryptos are not regulated by a central authority, the Blockchain that is the technology that powers cryptocurrencies like bitcoin. relies on users validating transactions and updating the Blockchain with new blocks of information.
In order to shield the manipulative attempts of bad actors, proof of work was implemented into Bitcoin.
Proof of work is a mechanism that allows users to validate cryptocurrency transactions by solving a complicated mathematical problem. Upon completion, a fixed amount of crypto is deposited into the user’s wallet.
The amount of carbon dioxide emitted by this energy usage will vary depending on how that energy was created. But, It was estimated by The University of Cambridge that Bitcoin alone generates 132.48 terawatt-hours (TWh) annually, which easily surpasses the annual energy usage of Norway at 123 TWh in 2020.
Since China banned cryptocurrency mining in 2021, the carbon dioxide produced by the US Bitcoin mining alone, where 35.4% of Bitcoin is mined is nearly 40 billion tons.
This is because the computing power needed for the support of Bitcoin’s underlying network is high, given that a single Bitcoin transaction can leave up to 350kg of carbon footprint which means Bitcoin farms require huge amounts of electricity to work.
Adverse Effects Of Bitcoin Mining
Bitcoin contributes to the deterioration of the environment because of its high energy consumption and the fact that over 60% of Bitcoin mining is done through unrenewable energy.
Bitcoin mining also contributes to the advancement of global warming towards the dangerous 1.5 degree level and if new energy generation means are not created, it is expected that global temperatures are likely to rise by 0.3C to 4.8C by the end of the century, which may render massive portions of the planet unfit to live in.
Bitcoin mining has been known to threaten energy grids in countries with high mining and energy usage activities. Cities in China, Kazakhstan, Iran and Kosovo have faced blackouts in recent years, leaving thousands of people without electricity for days.
Another concern is the energy consumption for transactions on the Blockchain. 2,292.5 kilowatt hours of electricity is expected to be burnt in a single Bitcoin transaction. That is enough to power a typical US household for 78 days. Now think of all the transactions that occur on the Blockchain daily.
The issue of physical electronic waste is also evident. Computers, graphic cards and more are used for mining and because higher computing power will generate more coins, miners are constantly upgrading and discarding old equipment, producing up to 30,000 tons of electronic waste every year.