“The Bitcoin transaction costs more electricity than any other transaction method humanity has ever known,” said Bill Gates …
In 2018, a Bitcoin expert at PwC, Alex de Vries, already made a wild estimate: Every year, Bitcoin mining servers around the world consume 22 TWh of electricity, almost equal to the electricity consumption of Ireland. But that was 3 years ago.
While the Bitcoin market has exploded throughout the year, there is no indication that the amount of electricity consumed by Bitcoin miners around the world is showing signs of slowing down.
According to the latest Bitcoin electricity consumption index measured by the University of Cambridge, Bitcoin mining globally consumes 128.84 TWh per year, more than the amount of electricity consumed annually in countries like Ukraine or the United States. ‘Argentina. Another study shows that the annual carbon footprint of the amount of electricity needed to mine and trade Bitcoin could be equivalent to all of Hong Kong’s carbon emissions.
A closer example, according to Digiconomist, will generate carbon emissions equivalent to 735,121 Visa transactions for every Bitcoin transaction and 55,280 hours of YouTube viewing.
About 75% of Bitcoin mining globally is currently concentrated in China, where electricity is cheap and easy access to manufacturers of hardware dedicated to Bitcoin miners. As a result, the amount of carbon emissions that Bitcoin miners in China emit as large as the emissions of one of the continent’s 10 largest cities – according to a recent study by a group of researchers at Qing University. . Hoa, Chinese Academy of Sciences, Cornell University and University of Surrey.
About 75% of Bitcoin mining globally is now concentrated in China. As a result, the amount of carbon emissions that Bitcoin miners in this country emit as large as the emissions from one of the 10 largest cities on the continent.
“The Bitcoin transaction costs more electricity than any other transaction method mankind has ever known” – billionaire Bill Gates recently said.
At a time when world leaders are increasingly concerned about climate and sustainability, they may target a market that currently has a market capitalization of over $ 1 trillion worth of Bitcoin.
Bitcoin operates on the blockchain platform, and it is this operating structure that causes Bitcoin cryptocurrency transactions to consume huge amounts of electricity. Bitcoin miners have to solve the problem of an algorithm through a high-powered mining system. On average, every 10 minutes a server finds a solution will be rewarded with a Bitcoin reward.
Miners tend to use a lot of miners, and the cooling systems are constantly working to solve more algorithms for more profit. Especially when the price of Bitcoin has skyrocketed near the recent $ 60,000 mark and Bitcoin’s market cap has surpassed $ 1 trillion, Bitcoin mining pools are near full capacity.
“The intensity of mining and the number of Bitcoin transactions has increased dramatically in recent years, with a potentially serious impact on the climate problem” – said Mr. Alex de Vries.
China is trying to become a pioneer in the fight against global climate change. Last year, the country set a goal of reducing net carbon emissions to zero by 2060. But the peak of Bitcoin transactions as the cryptocurrency market exploded during the year elapsed appears to threaten the viability of the goal.
“Without the right intervention, Bitcoin mining in China can flourish rapidly, posing a major threat to emissions reduction and carbon neutralization efforts in this country,” the research authors pointed out. “In this situation, the annual energy consumption of Bitcoin mining in China will reach a record 296.59 TWh by 2024, while generating 130.50 million tonnes of carbon emissions.”
According to the latest Bitcoin electricity consumption index measured by the University of Cambridge, Bitcoin mining globally consumes 128.84 TWh per year, more than the amount of electricity consumed annually in countries like Ukraine or the United States. ‘Argentina.
In an attempt to deal with the enormous environmental consequences of Bitcoin mining in particular and cryptocurrency trading in general, a Crypto Climate treaty was born not long ago.
This treaty is backed by a series of big names such as cryptocurrency firm Ripple, blockchain technology conglomerate ConsenSys and billionaire Tom Steyer – a strong voice in action against climate change. The group has ambitions to convert all blockchain cryptocurrency trading platforms to renewable energy by 2030, progressing towards zero net emissions across the crypto industry by 2040.
If successful, the Crypto Climate Treaty would address a practical problem facing many governments around the world.
But there’s a big challenge here: Bitcoin is the main player in the game, while the switch to renewables doesn’t completely address the fundamental nature of Bitcoin transactions that consume too much electricity.
In the case of cryptocurrency transactions moving to renewable sources, the total supply of electricity from renewables may not meet the demand for essential electricity. Such a situation would force other sectors to turn to fossil fuels.
This means that on the whole, governments continue to grapple with the problem of tackling global climate change.