Over the past few years, we have heard multiple allegations that Bitcoin is a threat to our environment. More specifically, the amount of energy and electricity required to keep the network operational is pretty astonishing. While the price of Bitcoin is going up to accommodate these increasing costs, it is evident there are serious concerns about the way this network operates.

Bitcoin is not Exactly Eco-friendly

While no one can deny that Bitcoin is a phenomenon unlike anything the world has ever seen before, it is not perfect either. Not only does the currency lack fungibility, privacy, anonymity, and scalability, but it’s also power-hungry in many ways. One needs dedicated, expensive hardware to keep the network chugging along, and the electricity costs required to do so are becoming more epic in proportion every single year. Right now, the Bitcoin network consumes as much electricity per day as does the country of Ireland.

It may seem crazy to compare Bitcoin’s electricity requirements with those of an entire country. However, it also shows why the proof-of-work algorithm used by Bitcoin gets so much negative attention from environmentalists all over the world. For a network incapable of processing even a fraction of Visa’s workload, the costs to operate it are incredibly steep. Then again, the miners who support the network are paid out in Bitcoin, which has netted impressive gains throughout 2017.

Recent statistics indicate that every Bitcoin transaction requires around 245 kWh to process, which is equivalent to around 3,200 hours of watching television. The Bitcoin network consumes a total of 70.5 million kWh per day, and almost 27 TWh – that’s terawatt-hours – per year. These numbers are staggering, especially for a new form of money most people still show no interest in using whatsoever.

None of these statistics are working in favor of Bitcoin, yet not everything is black and white. It would be easy to classify the world’s leading cryptocurrency as a pure threat to our environment, but it is difficult to say if that is truly the case. It all comes down to how the electricity used to mine Bitcoin is generated in the first place. Over the years, we have seen more companies switch to hydropower or even geothermal energy. These renewable energy sources cause far less pollution and are considered eco-friendly.

For the time being, it is impossible to gauge the true environmental impact of Bitcoin mining. One could always make the argument that this electricity could be used for other purposes, but the same could be said for virtually any other industry requiring a lot of electricity every single day. It is certainly true that this power consumption is increasing, as one Bitcoin transaction now consumes enough energy to power an entire household for almost a week. This is a very worrisome statistic, but it doesn’t constitute a threat to our society as a whole by any means.

Moreover, there is no real alternative to the status quo that would make a lot of sense. Proof-of-stake has often been touted as a viable option, but it is inherently insecure in every form we have come across so far. Bitcoin’s electricity usage is getting out of hand, but it’s not taking away energy from mainstream consumers by any means. Nor is it necessarily harmful to our environment either. Discussions like these will become more common over the coming years. In the end, it seems unlikely we will see Bitcoin move away from its current proof-of-work algorithm.

22 COMMENTS

  1. Physical currencies use energy throughout their life cycles. Production costs, Storage costs, transport costs, distribution costs, etc. Those would be much higher than CCs I would think.

  2. I found this about Aluminium :-

    “Worldwide production of aluminium in 2010 was 41.4 million tonnes. This means that 621 TerraWatt Hours of electrical energy were used in the production of aluminium. To put that in perspective, the total world production of electrical energy was 20261 TerraWatt hours, meaning that more than 3% of the world’s entire electrical supply went to extraction of aluminium.”

    Maybe Aluminium production is up to 650 TerraWatt Hours in 2017. So BitCoin is using only 4% of what just aluminum consumes, or roughly 0.1% of world production.
    I wonder if there’s a way to work out how much world wide fiat printing, storing, transacting would be, add to that all the credit card companies footprints, banks footprints, etc., etc., …
    Actually, when you think about it BitCoin could be much less than that massive industry. Add to that, BitCoin would less likely be used to fund wars and other world destroying activities … the list could be endless … 🙂

    • Luckily there is a new crypto that consumes hardly any energy, has no fees, instant transactions, no miners, no centralization and unlimited scalability.
      That crypto is called RaiBlocks and it does everything bitcoin cannot do.
      Go check it out.

      • Mining is overall good for a coin, history continues to prove that.

        If you want to save the environment stop eating meat, or better yet go out and vote for officials who will actually make the environment a priority. Those things will actually make a difference.

        • No, mining is very bad, it leads to centralization.
          Just look at bitcoin, 80% of the miners are located in china.
          What if the chinese goverment decides to ban the miners too?

          • Then other people will step up and mine in other countries. Easy answer.

            The problem with Bitcoin is it’s horribly inefficient algorithm that allows for cheap ASIC’s to mine vastly more effectively than standard PC components. Ethereum doesn’t have this issue.

          • I very much doubt if a transition to yet another monopoly of miners will be smooth enough not to make Bitcoin grind to a halt completely.

            Regarding ASIC resistance, it takes constant development, updates + testing to create a crypto that remains ASIC resistant.
            To compare: RaiBlocks development could stop right now and will basically be able to run forever without any updates.

            But simply put, the economic model of Bitcoin just doesn’t work, simply because the miners are given incentive to collude, to keep transaction fees as high as possible.

            And by the way, Ethereum is currently not production ready, it does not scale, they can only do max 20 tps.
            Visa does 1500 tps, RaiBlocks has recently been tested to do 7000 tps.

  3. This article is lazy and useless in defending bitcoins energy consumption.
    The only argument it puts forth is
    ” It all comes down to how the electricity used to mine Bitcoin is generated in the first place. ” Which is a laughable defense IMO.
    The only real argument (that I can see) is how Bitcoin’s energy consumption compares to the current system’s energy costs. Anyone have any interesting info on that?

  4. I don’t completely agree with the statement regarding the environmental impact “It all comes down to how the electricity used to mine Bitcoin is generated in the first place.” regardless of how you slice it, it is that much extra energy being used that could have been supplying something that is now still generating CO2. There is the argument that some sources of energy were only tapped for and funded by a Bitcoin mining opperation but that would be a profitability and viabilty choice versus selling the energy on directly. For the record, I am an advocate of blockchain tech but I think this argument is twisting the truth a little.

    • Not really, look at it this way there might be enough food in the world to feed everyone but unless the food is where the hungry people are it doesn’t matter. That’s basically the same with energy. For example in Texas we have had negative energy prices before. Literally people were paid to use power because they needed to get rid of excess. We are a separate grid so we can’t sell to other states. Since power is hard to store effectively we are already burning extra power just making sure we are ready when we need to be. However I do think that hashing could have a bigger impact. For example imagine a crypto where you had to mine it with renewable or the hash actually calculated a useful value for science or something.

      • I can see that the situation you have in Texas might relate well to the energy markets in isolated places like Iceland, where it would be difficult to sell any excess power. But most facilities in mainland continents can sell their power widely these days. Places like the UK have facilities to store energy in pumped water systems. Those that still have uneven loading now have the option of installing battery systems to spread loading, as Autralia have just done with the help of Elon Musk.

      • Use the excess energy to split water into Hydrogen and Oxygen and store it (somewhere safe) then when you need energy, burn it to produce water again.
        Rinse and repeat as often as necessary.

  5. “While the price of Bitcoin is going up to accommodate these increasing costs”

    No, the amount of mining, consequently energy consumption, is going up, incentivised by the increasing price.

  6. Coins like Foldcoin, Curecoin and Gridcoin are released when a user allows their PC to do number crunching for the world’s universities.
    This might be a more environmentally useful way of utilising energy to generate currency.

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