Bitcoin Has a Mind-Blowing Environmental Impact
First published by DigiConomist.
The record-breaking surge in Bitcoin price at the start of 2021 may result in the network consuming as much energy as all data centers globally, with an associated carbon footprint matching London’s footprint size.
Photo: The Guardian.
Alex de Vries, a Dutch economist, created the Bitcoin Energy Consumption Index, one of the first systematic attempts to estimate the energy use of the bitcoin network.
Now De Vries estimates the network uses more than twice – and possibly three times – as much energy: between 78TWh and 101TWh, or about the same as Norway.
Based on a Bitcoin price of $42,000 (the current price is $57,000), it is estimated that the entire Bitcoin network could consume up to 184 TWh per year (currently 79 TWh annually), close to the amount of energy all data centers consumed globally.
The market price of Bitcoin is a strong incentive for miners to invest in more hardware and electricity. As the price rises, more people put in orders to purchase and run mining hardware, causing an increase in energy consumption.
“Bitcoin is estimated to consume as much energy as entire Europe.”
The consumed energy could also result in 90.2 million metric tons of CO2, comparable to the carbon footprint of metropolitan London. This would also exceed the total amount of annual emissions related to gold mining, estimated at 81 million metric tons of CO2.
Bitcoin mining rigs’ short shelf-life can also mean a substantial amount of electronic waste in the coming years. Mining devices also exacerbate the current global chip shortage by competing for the same chips as personal electronics and electric vehicles, which play an essential role in combatting climate change.
In order to limit the growing footprint of the sector, De Vries suggests policymakers could follow the lead of regions that have put pressure on bitcoin miners. The founder of the world’s largest hedge fund has warned that Bitcoin could be “outlawed” in the US, despite experts warning that its decentralised network makes a ban virtually impossible to implement.