The Proof of Work (PoW) consensus algorithm used by Bitcoin is the major reason why Bitcoin, as it revolutionizes financial transactions, is harming the environment. A research published on Joule has recorded that BTC miners are using massive amounts of money to validate transactions.
According to the research:
“Participation in the Bitcoin validation process requires specialized hardware and vast amounts of electricity, which translates into a significant carbon footprint…. We determine the annual electricity consumption of Bitcoin, as of November 2018, to be 45.8 TWh and estimate that annual carbon emissions range from 22.0 to 22.9 MtCO2.”
A million tons of carbon dioxide
For context, MtCO2 can also be read as a million tons of carbon dioxide. The tons of CO2 produced by BTC miners during the mining process is in the same range as the one produced by cities such as Las Vegas, Sri Lanka, Jordan, Kansas, among other big cities in the world. The carbon dioxide produced by BTC miners is a considerable chunk of the 37 billion tons of the greenhouse gas produced when fossil fuels are burnt. The values were recorded in 2018.
Notably, according to the research, Asia houses most of the BTC miners followed by Europe and North America closing off the top three best destinations for Bitcoin Miners. In terms of percentages, Asia, Europe, and North America account for 68 percent, 17 percent, and 15 percent of the computing power used by BTC miners respectively.
Values likely to be much higher
Unfortunately, other researchers, although not involved in the current research, indicate that the values captured in the latest reporter may be lower than actual figures.
For example, Alex de Vries, an economist who published his findings on the Joule journal last year, noted that the amount of electrical power used by BTC miners is on the rise and would continue to rise.
“The Bitcoin network can be estimated to consume at least 2.55 gigawatts of electricity currently (at the time of the report), and potentially 7.67 gigawatts in the future, making it comparable with countries such as Ireland (3.1 gigawatts) and Austria (8.2 gigawatts). Economic models tell us that Bitcoin’s electricity consumption will gravitate toward the latter number.”
Vries continued to note that BTC miners use 1,200 times more power than the one used by traditional financial institutions to process a transaction.
BTC miners using renewable energy sources to power their rigs
The research showing the massive amount of carbon dioxide produced by Bitcoin miners comes a few days after another study revealed that Bitcoin miners are shifting to renewable sources to power their rigs.
As per the report, Bitcoin miners embracing renewable energy sources to power their rigs:
“Could help turn loss-making renewables projects profitable and in time…could act as a driver of new renewables development in locations that were previously uneconomical.”
Unfortunately, using renewable energy does not automatically reduce the amount of carbon dioxide produced by BTC miners.