Even if it is a virtual currency, bitcoins use an enormous amount of energy and are not ecological at all. So much so that last year they consumed the energy equivalent of the whole of Argentina.
This was stated in a recent research by the University of Cambridge who estimated that cryptocurrency consumes about 121.36 terawatt hours per year. But how is it possible that a virtual currency can consume so much energy? The answer lies in the practice of mining, or the activity of generating bitcoins (a term associated with “gold mining”, the extraction of gold in mines).
To better understand it is important to clarify the functioning of this coin, which is shared and therefore encrypted through a technology called blockchain. This means that to avoid hacking, modification and falsification of what is virtual information, many computers control it at the same time.
Each of the volunteers who control the various blocks of information are called miners and for their service they get bonuses (always in cryptocurrencies). So all the transactions that normally take place on the surface are allowed by the incessant computation of these miners using powerful and extremely energy-consuming computers.
The “miners” are constantly at work and the mega computers they use obviously attach themselves to electricity, often perhaps produced by coal as in China or Siberia. And so, the amount of operations to generate and mine bitcoin has become so high that it requires large amounts of resources in terms of electricity and computational power, with the relative emission of 36 million tons of carbon dioxide per year, according to data from the ‘International Energy Agency.
And then there is the problem of electronic waste, a direct consequence of the constant renewal of computers. Here, too, the calculation is around 11,000 tons of waste per year, which cover an amount of e-waste equal to that produced by a small nation like Luxembourg.
Researchers at the University of Cambridge used an online calculator based on an average electricity price per kilowatt hour of $ 0.05 and came to quantify the annual energy consumption of cryptocurrency at 121.36 terawatt hours: we are practically talking about just over 6 billion dollars. To get an idea: the whole of Argentina consumes 121 TWh, the United Arab Emirates 113.20 TWh and the Netherlands 108.8 TWh.
According to Michel Rauchs, a Cambridge researcher who co-invented the tool used to estimate the energy consumption of bitcoins, the energy used in mining “could power all kettles in the UK for 27 years”. And unless the value of the cryptocurrency drops suddenly, “this energy consumption, and therefore the production of CO2, is not destined to decrease”.
Supporters of the cryptocurrency conceived by Satoshi Nakamoto highlight how the maintenance of today’s banking system is decidedly more expensive in terms of energy, including servers, branches and ATMs, but this does not cancel the weight of bitcoins, also because there are at least others in the world 500 cryptocurrencies that make the picture of the environmental impact of virtual currencies disheartening.
To rebalance the blame, during his speech in the BBC Tech Tent podcast, Rauchs stressed that the energy consumption of appliances that are always on and not used in the United States alone would be enough to power the entire Bitcoin network for a year. This certainly does not represent a mitigating factor for bitcoins but it is a warning for all of us to be careful of stand-by and to avoid leaving appliances on. The Planet would benefit from it.