Environmental Analysis on If Bitcoin Mining Is Detrimental
To maintain the credibility of its network, Bitcoin uses the proof of work consensus algorithm. In this case, there is a lot of computing energy involved to solve complex equations by miners in transaction verification. It contributes to the safety of the blockchain while producing more coins necessary in the crypto market circulation. Furthermore, miners get their rewards from this process.
However, it is not the first time you will hear about bitcoin mining sentiments and the concern inherent in how it affects the environment. Therefore, is bitcoin mining truly detrimental to environmental conditions or not?
Bitcoin Mining Popularity
In the past, bitcoin mining was most favorable to parties who could afford expensive mining equipment. That included powerful machines and ASIC bitcoin mining chips produced by leading tech companies globally. However, times are changing, and manufacturers have cheaper options for everyone interested.
Despite the poor performance of the coin currently, there is still a rising interest in bitcoin mining. Furthermore, it has been trending news that the 19th million coin was mined recently, placing a little over 19 million coins in circulation and less than 2 million coins left to be mined.
Arguably, retail bitcoin mining has not been the most popular path, but new miners are taking on to social sites to find answers. The scope expands beyond how to get started in the industry, digging deep into current trends and the best mining equipment.
Reddit seems to be a leading platform where these discussions are more active than on other platforms. Additionally, the overall subscribers and posts on the crypto mining topic are increasing compared to previous years.
Considering countries like China, which were topping in the crypto mining sector, backing out of the industry could be a reason for the increased interest elsewhere. According to statistics, the US, Kazakhstan, and Russia are leading the industry as of 2021. Nonetheless, it is still a pressing question whether there is any future for retail miners in the current trend.
Annual Estimated Energy Consumption by BTC Mining
The primary concern for most environmental enthusiasts is energy consumption, the carbon emissions of the mining rigs, heat emissions, and pollution. Energy consumption is not a new worry as the proof of work consensus is known for its heavy energy drainage. Most ASIC mining equipment uses well over 1000 watts for over 11 terahash per second.
The more efficient the equipment, the higher the energy consumption, with some crossing beyond 3000 watts. Normally, this could be more than the daily consumption of a well-off household. However, the Bitcoin Mining Council argues that the numbers put forward as far as bitcoin mining is concerned are exaggerated.
The BMC argued in late 2021 that BTC mining processes only consume 0.12% of the global energy produced. Around the same period, statistics show that bitcoin mining consumed approximately 170 terawatt-hours per year. At the minimum, the energy consumption ranged at about 43 terawatt-hours per year.
The Cambridge Centre of Alternative Finance, using a 7-day moving average trend indicator, places the minimum estimate and maximum estimate of the current energy consumption at 53.73 TWh and 336.41 TWh, respectively.
The comparisons of BTC mining energy consumption matching that of a whole country every year are not new. Nonetheless, others argue that this is not the only industry consuming such energy levels. Therefore, why is it that people are focusing too much on BTC?
Environmental Impacts
Bitcoin does not rank as one of the green blockchains taking root in the market today. Some countries, including China, before its ban on all crypto activity, some countries, including China, take advantage of fossil fuels as a cheaper option for BTC mining. Notably, China used coal to power the mining rigs, a known fuel source producing heavy carbon emissions.
The relocations of mining plants to other countries leads to the same issue. At the end of the day, especially with the rising inflation, people will settle for cheaper avenues rather than environmental-friendly options.
Other impacts the processes have on the environment include the heightened heat emission levels due to the energy-intensive endeavor. Eventually, besides increased global warming dangers from the emissions and heat, more energy is necessary for air conditioning. Otherwise, the conditions could prove detrimental to employees in the rigs.
Lastly, the hardware used is not organic. Eventually, a mining rig will have unusable devices as new technology comes into the market. Disposal of such equipment increases the pollution levels in soil and water, consequently affecting the surrounding ecology.
How Can the Trend Change?
There are a lot of talks concerning renewable energy for bitcoin mining. Arguably, it may not be the most profitable way to go, but it would reduce the general impact on the environment. Big figures, including Tesla and Iris Energy Limited, are putting resources into providing sustainable energy for BTC mining.
Other companies such as Intel produce more energy-efficient and better-performing ASIC chips that could lower the energy consumption during mining. Recently, it launched the Blockscale ASIC mining chip, consuming approximately 580 watts per transaction, lower than the chips in the market today.
Lastly, changing the overall consensus algorithm of the network is another way out. Proof of Stake, Proof of Authority, Proof of History, and more are coming up, proving to be more environmentally-friendly by thousands of times than PoW.
Bitcoin Mining is Detrimental
Bitcoin mining is not the only industry with detrimental effects on the environment. It contributes to cumulative emissions and energy consumption issues affecting the global community. The industry might not be ready to reduce the bitcoin and overall crypto mining impacts.