While the world of cryptocurrency is still new, it has grown significantly in recent years. And there is no bigger name than Bitcoin in this field. However, is Bitcoin having a negative impact on the environment?
Yes, without a doubt it is having an impact on the environment.
For those not aware, Bitcoin is mined by investors. This is a process where the miner verifies the transaction history to avoid the double spending of a bitcoin.
If they can verify the transaction and be the first to do it for 1MB of data, they have a chance of receiving bitcoin.
This is how bitcoin comes into circulation. However, as the value of this cryptocurrency has soared, so has the electricity usage of the hardware that is mining it. This is causing huge emission concerns, which could damage the coin’s future.
What Hardware Can Mine Bitcoin?
The question for many, especially those interested in earning bitcoin, is what kind of hardware do I need?
When Bitcoin was still new, you could successfully mine it, and other cryptocurrencies, with a basic home computer. Eventually, the complexity of mining rose, thus the hardware became more expensive.
At one point, the high-end PC gaming market was affected as the price of new graphic cards (GPUs) soared out of control. While they eventually stabilized, it was once bitcoin miners moved on to more dedicated hardware.
Therefore today, using a computer, even a high-end one, will not get you the same results. Instead, most dedicated miners use much larger and more powerful hardware like ASICs.
And these devices use a lot of energy.
How Much Electricity Does Bitcoin Mining Use?
One of the biggest strengths of cryptocurrency is that they are hard to track. This makes it difficult to determine the exact amount, but the University of Cambridge seems to have an estimate.
Cambridge estimates that the mining process uses 129.22 TWhs each year. And that number is increasing each year as the complexity of mining bitcoin increases.
However, that number may not mean much to the average person, so let’s put it into perspective.
The Netherlands used 111 TWhs in 2019, thus Bitcoin mining is currently using more electricity than an entire nation. And the vast majority of that energy is going to be coming from carbon-emitting sources.
Of course, there is no way to know the exact amount of energy being used. Thus, the number might be much higher.
Electricity Usage Will Impact Bitcoin’s Future
As many cryptocurrency enthusiasts yell from the rooftops about the potential of Bitcoin, electricity usage is a major concern. In fact, it’s the coin’s biggest issue.
As more and more bitcoin enters the market, the cost of generating more rises. And this happens every two weeks.
It is simply not sustainable unless there are breakthroughs in the technology used to mine it that significantly lowers electricity usage or the method behind it changes. And this issue is a big red flag for investors.
Many companies have already begun working on going emission-free to meet investor demands or changing how they do business. It’s very unlikely that it will gain the popularity it needs from governments as they all pursue greener futures.
Robert has been following and writing about environmental stories for years at GreenGeeks. He believes that highlighting environmentally friendly practices can help promote change in every household.