Boffins at the Technical University of Munich (TUM) have figured out that the world’s most dominant cryptocurrency is responsible for pumping out around 22 megatons of carbon dioxide every year – the same amount as the infamous US home of 24-hour casinos. Researchers at TUM analysed masses of data such as the IP addresses of bitcoin ‘miners’ who eat up vast amounts of electricity to harvest pieces of the cryptocurrency. Miners set their machines up to solve various mathematical conundrums in order to execute transactions to be rewarded with bitcoins, but the cost in electricity to do so can often outweigh the value of the coin itself.
This, says the TUM research team, poses the question of what effect bitcoin is having on climate change. Bitcoin accounts for more than half of all the world’s cryptocurrency transactions, meaning the shocking figures produced by the German scientists could easily be doubled.
“Bitcoin’s power consumption may only be the tip of the iceberg,” says the report by lead researcher Christian Stoll.
“Including estimates for three other cryptocurrencies adds 30 TWh to our annual estimate for bitcoin.
“If we assume correlation to market capitalization and consider only mineable currencies, this more than doubles the power consumption we estimate for bitcoin.”
The power usage for mining bitcoin alone is the equivalent of the power output of Sri Lanka, the paper confirms.
Stoll concludes: “Participation in the bitcoin blockchain validation process requires specialised hardware and vast amounts of electricity, which translates into a significant carbon footprint.”
It’s a concern that has raised eyebrows within environmental campaign group Greenpeace.
“The latest analysis of the energy footprint of bitcoin reaffirms what has been well documented previously - the energy intensive nature of bitcoin mining is driving significant new demand for electricity, particularly in places like China and Korea that remain heavily dependent on fossil fuels” said Gary Cook, Greenpeace Senior IT Sector Analyst.
“If bitcoin and other cryptocurrencies hope to maintain their social license in a world that is increasingly driven to action by the Climate Emergency, not only must there be changes to the ‘Proof of Work’ model to make mining far less energy intensive, but mining must also be restricted to locations where mining is powered by renewable sources of electricity, and not driving new demand for fossil fuels.”