Mining Bitcoin is a hugely wasteful process. For miners to accrue more of the cryptocurrency, powerful computing hardware must solve increasingly difficult, and pointless, puzzles. The more computing power, the better your chances are of making money. But how much electricity is the industry wasting—and what is the environmental impact?
According to the latest study to put a figure on the industry, Bitcoin mining accounts for about 0.2% of global electricity consumption, and produces as much carbon dioxide as Kansas City.
The analysis published in the journal Joule claims to deliver a more accurate estimate of the carbon footprint of Bitcoin than previous studies, by using data from the initial public offering (IPO) filings of the major companies producing hardware for mining the currency.
The estimate is well below one published last year in the same journal. That research, by economist Alex de Vries, the founder of Digiconomist, concluded that mining operations might account for 0.5% of worldwide electricity use by the end of 2018—and eventually as much as 5%.
The new study by researchers at MIT and the Technical University of Munich suggests that Bitcoin mining was consuming 45.8 terawatt-hours of electricity per year as of November 2018. That, in turn, produced estimated annual emissions of between 22 and 23 megatons of carbon dioxide, slotting the operations between the nations of Jordan and Sri Lanka in terms of greenhouse-gas pollution.
Including other cryptocurrencies in the calculation more than doubles estimates of how much energy is being used.
Using data disclosed in the IPO filings of Bitcoin hardware companies Bitmain, Canaan, and Ebang, the researchers were able to determine the types and market share of hardware being used by miners. By relying upon the manufacturers’ estimates of energy efficiency—and taking into account requirements for cooling, transformers, and other parts of the mining operation—they were then able to estimate the overall power consumption of the Bitcoin network.
The team also used the IP addresses of devices to determine the geographical location of mining operations, from which they could then calculate emissions considering the mix of electricity sources in those regions. Together, this allowed the researchers to approximate the overall carbon footprint.
But not everyone was convinced the new paper delivers the definitive assessment of Bitcoin. Jonathan Koomey, a researcher who has long studied the effects of information technology on energy use and emissions, said in an email that there are several reasons to view the latest estimates cautiously.
First, the volatility of the cryptocurrency market means the impact in November 2018 doesn’t necessarily reflect the impact today, as mining rises and falls with prices.
In addition, Koomey noted in a paper earlier this year that manufacturers’ own estimates of energy efficiency aren’t necessarily reliable. The fluctuating numbers of servers installed, the complexity of mining operations, shifting computational loads, and other factors complicate the ability to accurately estimate total electricity use at any point in time.
Even if we can’t ascertain the exact level of Bitcoin-related emissions, we do know one thing for certain: they’re too high. While there are some proposed alternatives to the current, energy-intensive process of mining, none of these are game-ready yet.
To be sure, 23 megatons of carbon dioxide is a relatively small share of the roughly 30,000 megatons of energy-related emissions globally each year, and an even tinier slice of total emissions generated economy-wide. But the last thing the world needs to do right now is invent new ways of generating additional carbon dioxide at a point when we should be slashing emissions as rapidly as possible to confront climate change.