Combusting coal. Driving cars and trucks. Flying airplanes. Operating industrial parks. The list of top carbon-intense activities may soon be getting a new addition: bitcoin mining.
To most folks working outside of tech and economic spheres, it’s mind-boggling to conceptualize just what bitcoin is, never mind that it has the potential to have a very real – and very large – impact on our physical world. The mysterious cryptocurrency, so-named for the encryption techniques used to regulate its generation and transference, is like a form of digital cash; it takes no physical form, but the specialized computer hardware used to produce it certainly does.
That creation of bitcoin happens through a process called “mining.” To create bitcoin, you must lend your computer’s processing power to solving complex, time-intensive algorithms. Why? This makes possible the underlying goal of cryptocurrencies: cut out a centralized authoritative power (like a bank) by distributing management among a massive network of individual users. The larger the network grows, the harder the algorithms become to solve, the more computing power needed… and that massive network requires a lot of power.
The sheer amount of electricity used by the bitcoin network is staggering: at the time of this writing, the estimated amount is 48.8 terawatt hours (TWh) per year, and climbing every day. Based on recent estimates, that consumption outranks the electricity usage of entire nations, including New Zealand, Peru, and Iraq. Perhaps most alarming, network electricity consumption has increased five-fold in the past year alone. That rate is projected to continue, hitting 125 TWh per year by 2019 -- on par with electricity usage of countries like Argentina, Sweden, and the United Arab Emirates.
The problem with the colossal bitcoin beast is not necessarily its hunger for electricity. After all, carbon-neutral electricity generation is making great strides – think wind and solar power. Rather, the problem is where this electricity consumption is occurring. Bitcoin mines, those geographic locations of physical computer infrastructure scattered around the globe, are concentrated in nations like China, where carbon-intense, coal-fired power plants still dominate national electricity production.
In a recent correspondence with Nature magazine, environmental engineer Spyros Foteinis translated the global electricity usage for bitcoin into atmospheric CO2 emissions. Using established methods to perform a life-cycle impact assessment of bitcoin and ethereum (another form of cryptocurrency), he calculated an annual carbon footprint, “comparable to that of some 6.8 million average European inhabitants – or as much as 43.9 million tonnes of carbon dioxide equivalent.” For comparison, that’s more CO2 than 14 different U.S. states emit each year.
Among the list of top environmental concerns, perhaps it’s time we all start paying greater attention to this dark horse.
February 15, 2018 | Follow Rachel Valletta: @ErraticsFanatic on Twitter.