The Bitcoin mining industry's energy consumption, which equals that of Chile's, also generates massive amounts of e-waste.
As Bitcoin’s market cap has continued to grow into hundreds of billions of dollars over the past several years, so too has the mining industry that supports the network: according to some estimates, Bitcoin’s mining industry generated as much as $5.4 billion in revenue last year.
However, the growth of the Bitcoin network, as well as the Bitcoin mining industry, has not come without a steep cost to the environment.
Indeed, there have been many reports on the Bitcoin network’s energy consumption problem. However, Alex DeVries, Blockchain expert at accounting firm PriceWaterhouseCoopers, claims that massive amounts of e-waste will eventually be generated by outdated mining equipment, 98 percent of which he says becomes obsolete within one and a half years after their initial use.
Indeed, through his website, Digiconimist, which Mr. DeVries founded to highlight Bitcoin’s energy problem, Bitcoin generates as much e-waste each year as the nation of Luxembourg, which has a population of over 600,000 people (2018).
“It’s impossible for 98 percent of [mining] devices during their lifetime to make the calculation that actually results in a reward.
“The shocking thing is the average lifetime of a bitcoin mining machine is one and a half years, because we have a new generation of machines which are better at doing these calculations,” Mr. DeVries told the Telegraph.
He also pointed out that the nature of Bitcoin mining is such that myriad machines are constantly competing for a reward that most of them will never get: “they are sort of participating in a massive lottery and every 10 minutes one gets lucky and gets to produce the next block,” he explained.
“That means it’s impossible for 98 percent of the devices during their lifetime to make the calculation that actually results in a reward. So, the rest are just running pointlessly for a few years, using up energy, and producing heat, and then they will just get trashed because they can’t be repurposed. It's insane."
The footprint of a single transaction is the same as 780,650 Visa transactions or spending 52,043 hours watching YouTube.
According to Digiconmist, it is estimated that the amount of energy needed to run the Bitcoin network annually has surged to a record-breaking 77.78 terawatt-hours. That's roughly the same as the entire electrical consumption of the nation of Chile, which has a population of more than 18 million people who use an estimated 2,028.89 kilograms of oil equivalent per capita each year (as of 2015).
Based on these estimates, as well as the estimated e-waste generated by the Bitcoin mining industry, Mr. DeVries has said that the footprint of a single transaction is the same as 780,650 Visa transactions or spending 52,043 hours watching YouTube.
Time for innovation
But does this mean that we should all stop using the Bitcoin network? While there are certainly some that argue that this is the solution, others are calling for innovation and policy decisions that could alleviate the environmental impact of Bitcoin.
Indeed, in spite of its massive carbon footprint, the other social benefits of the Bitcoin network are increasingly well known. In the July 2018 edition of Energy Research & Social Science, researcher Jon Truby of Qatar University wrote that “blockchain technology has been advocated as being capable of delivering environmental and social benefits under the UN’s Sustainable Development Goals.”
Therefore, “[...]The question is how to encourage a shift to less energy-intensive Blockchain technology without damaging the sector, “ Truby wrote.
Some blockchain networks--including Ethereum and Decred--have already made the effort towards switching from Proof-of-Work (PoW) consensus mechanisms (which are very energy-intensive) to Proof-of-Stake (PoS) consensus mechanisms or blended mechanisms that use elements of both PoW and PoS.
What do you think the solution is for reducing the impact of the Bitcoin network on the environment? Let us know in the comments below.
As Bitcoin’s market cap has continued to grow into hundreds of billions of dollars over the past several years, so too has the mining industry that supports the network: according to some estimates, Bitcoin’s mining industry generated as much as $5.4 billion in revenue last year.
However, the growth of the Bitcoin network, as well as the Bitcoin mining industry, has not come without a steep cost to the environment.
Indeed, there have been many reports on the Bitcoin network’s energy consumption problem. However, Alex DeVries, Blockchain expert at accounting firm PriceWaterhouseCoopers, claims that massive amounts of e-waste will eventually be generated by outdated mining equipment, 98 percent of which he says becomes obsolete within one and a half years after their initial use.
Indeed, through his website, Digiconimist, which Mr. DeVries founded to highlight Bitcoin’s energy problem, Bitcoin generates as much e-waste each year as the nation of Luxembourg, which has a population of over 600,000 people (2018).
“It’s impossible for 98 percent of [mining] devices during their lifetime to make the calculation that actually results in a reward.
“The shocking thing is the average lifetime of a bitcoin mining machine is one and a half years, because we have a new generation of machines which are better at doing these calculations,” Mr. DeVries told the Telegraph.
He also pointed out that the nature of Bitcoin mining is such that myriad machines are constantly competing for a reward that most of them will never get: “they are sort of participating in a massive lottery and every 10 minutes one gets lucky and gets to produce the next block,” he explained.
“That means it’s impossible for 98 percent of the devices during their lifetime to make the calculation that actually results in a reward. So, the rest are just running pointlessly for a few years, using up energy, and producing heat, and then they will just get trashed because they can’t be repurposed. It's insane."
The footprint of a single transaction is the same as 780,650 Visa transactions or spending 52,043 hours watching YouTube.
According to Digiconmist, it is estimated that the amount of energy needed to run the Bitcoin network annually has surged to a record-breaking 77.78 terawatt-hours. That's roughly the same as the entire electrical consumption of the nation of Chile, which has a population of more than 18 million people who use an estimated 2,028.89 kilograms of oil equivalent per capita each year (as of 2015).
Based on these estimates, as well as the estimated e-waste generated by the Bitcoin mining industry, Mr. DeVries has said that the footprint of a single transaction is the same as 780,650 Visa transactions or spending 52,043 hours watching YouTube.
Time for innovation
But does this mean that we should all stop using the Bitcoin network? While there are certainly some that argue that this is the solution, others are calling for innovation and policy decisions that could alleviate the environmental impact of Bitcoin.
Indeed, in spite of its massive carbon footprint, the other social benefits of the Bitcoin network are increasingly well known. In the July 2018 edition of Energy Research & Social Science, researcher Jon Truby of Qatar University wrote that “blockchain technology has been advocated as being capable of delivering environmental and social benefits under the UN’s Sustainable Development Goals.”
Therefore, “[...]The question is how to encourage a shift to less energy-intensive Blockchain technology without damaging the sector, “ Truby wrote.
Some blockchain networks--including Ethereum and Decred--have already made the effort towards switching from Proof-of-Work (PoW) consensus mechanisms (which are very energy-intensive) to Proof-of-Stake (PoS) consensus mechanisms or blended mechanisms that use elements of both PoW and PoS.
What do you think the solution is for reducing the impact of the Bitcoin network on the environment? Let us know in the comments below.
Rachel is a self-taught crypto geek and a passionate writer. She believes in the power that the written word has to educate, connect and empower individuals to make positive and powerful financial choices. She is the Podcast Host and a Cryptocurrency Editor at Finance Magnates.
Australia Gears Up for Bitcoin ETFs: ASX Leads the Charge
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
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Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
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Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
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#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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