In a new study, scientists have estimated the past and future environmental impacts of Bitcoin mining. Their results indicate that the impact could be lower than previously thought, suggesting that the advantages of cryptocurrencies extend beyond consideration of convenience and the stronger security associated with newer forms of economic transaction.
In research supported by the Independent Research Fund Denmark, scientists have assessed the environmental impacts of Bitcoin mining. This involved looking at the transaction process involved with the digital currency.
With Bitcoin all transactions are stored digitally as “blocks” in a chain that is kept by a network of peers. Through the use of digital systems, Bitcoin miners compete to solve a mathematical puzzle. The winner of this contest (which involves being able to add the next block of data to the chain), receives Bitcoin currency. Anyone with access to the internet and suitable hardware can participate in mining.
In recent years critics have homed in on Bitcoin’s carbon footprint, arguing that mining is a huge waste of energy that is damaging to the environment. But is the environmental impact as great as some might fear?
Certainly, Bitcoin mining requires substantial electricity to power the required computer. However, it stands that recent estimates of the impact linked to energy use suffer from a lack of accurate data.
Seeking to address this, the new research estimates the electricity consumption and carbon dioxide emissions for each stage of Bitcoin mining over a one-year period. The assessment extends from the extraction of raw materials needed to produce the computer equipment to operational use.
This analysis reveals that the Bitcoin network consumed 31.3 Terawatt-hours of electricity and generated 17.3 megatons of carbon dioxide over one year. These assessments come out lower than earlier estimates.
It was found that almost all of the environmental impact comes from the mining equipment, with minimal contributions from production and recycling. Importantly the geographical location of the miners has the biggest impact. The areas contributing the most are places like China.
This means that the environmental impact can be reduced, especially as mining equipment becomes more efficient and the use of renewable energy sources increases. It also stands that if miners are relocated to cooler climates, less energy will be needed.
The research has been published in the journal Environmental Science & Technology, with the study titled “Life Cycle Assessment of Bitcoin Mining.”
