A new study shows that mining cryptocurrencies are much more energy-intensive than mining their shiny counterparts like copper, gold, or platinum.
Researchers have studied the unusual energy requirements of a Bitcoin mining company for years, and this first-of-its-kind comparison helps put mining operations in their natural context and illustrate their toll on the environment.
Cryptocurrencies are a form of payment based on blockchain technology, a digital ledger that tracks transactions for verification.
Cryptocurrency mining essentially adds a new block to the blockchain while the person doing the mining gets the digital coins.
The entire mining process takes place in the virtual world, where computers perform complex and intensive calculations, and the computer that solves the problem first gets the mentioned block.
These calculations take a huge and growing amount of energy, and previous estimates show that the Bitcoin industry consumes as much energy as a small or medium-sized country.
Attempts to measure the amount of energy needed to operate the Bitcoin network have focused on the overall size of the network, and one estimate issued in November 2017 indicated that the network’s energy consumption is equivalent to that of Ireland.
Another estimate indicated that it produces annual carbon emissions similar to the emissions issued by one million flights across the Atlantic Ocean.
To expand our understanding of energy consumption, the new research uses data on the energy use of mining Bitcoin as well as Ethereum, Litecoin, and Monero, three other popular cryptocurrencies.
The study found that over the past 30 months, the energy consumption required to mine cryptocurrencies has increased significantly even as cryptocurrency markets have been subject to volatility.
The amount of energy required now rivals developed countries such as Denmark
Max Krause, an environmental engineer at Oak Ridge Institute of Science and Education who led the study independently of his day job
The amount of energy needed to mine $1 worth of Bitcoin is more than twice what it takes to mine the same value of copper, gold, or platinum.
Max Krause.
Researchers estimate that carbon emissions from mining operations range from 3 to 15 million tons of carbon dioxide globally, but carbon intensity, or the amount of carbon emitted per transaction, varies greatly by country.
China, where many mining operations are concentrated, is considered the place that consumes large amounts of carbon.
Canada is home to some of the least carbon-intensive mining operations in the world, emitting four times less carbon dioxide than China.
The study notes that its estimates of the energy consumption of digital currencies could be conservative because it does not take into account cooling and other processes that require energy to keep mining operations running.
Max Krause said that all this talk about the environmental impact of digital currencies still seems very academic and far-fetched, which prompted him to add a comparison that most people can understand.
This is why analyses also compare cryptocurrency mining to gold, platinum, copper, aluminum, and rare earth mining operations.
The results showed that cryptocurrency mining operations consume significantly more energy per dollar than the value extracted from their metal counterparts.
The researcher added that the goal of the research is not to pass judgment on cryptocurrencies, but to help the public better understand that the intangible blockchain technology has very tangible impacts, and noted that improvements could reduce the industry’s impact in the long term.
The study also shows that moving the economy away from fossil fuels and towards renewable energy may help reduce the impacts, as Canada’s huge hydropower plays a major role in making its mining operations less carbon-intensive than China.
In addition, lower costs of wind and solar should reduce carbon emissions from cryptocurrency mining operations.
