Cryptocurrency mining a waste of resources
The trouble is the computation itself is make-work: solving tough but irrelevant cryptographic problems merely to deter fraudsters. Mining — as the process of creating new bitcoins is known — used to be a fairly trivial task possible on a home computer. And as the number of bitcoins in circulation grows towards the artificially imposed ceiling of 21 million, mining each new one takes yet more computation. This burgeoning industry is hugely wasteful.
Energy consumption is so vast that some mines are sited near the Arctic circle to cut down on cooling costs. Advertisement Bitcoin is no stranger to controversy. But until now its profligacy has largely gone unchallenged. That needs to change.
Computing power is a precious resource, as is the electricity required to run the machines. To allow this to be squandered on pointless tasks is extravagant at best. If bitcoin fulfils its ambition to compete with, or even supersede, regular currencies issued by central banks, its wastefulness would amount to a scandal.
Whether it is workable and preserves the commitment to openness remains to be seen. Some cryptocurrencies do not use mining, but Bitcoin is unlikely to change its consensus algorithm. For example, the Cambridge Bitcoin Electricity Consumption Index estimates that Bitcoin, the most widely-mined cryptocurrency network, used an estimated 85 Terawatt-hours TWh of electricity 0.
Another estimate by Digiconomist, a cryptocurrency analytics site, places the figure at This computes to around 1, Ethereum , the second-largest cryptocurrency network, was estimated to use The average Ethereum transaction required kilowatt-hours of electricity. However, since Ethereum rolled out its proof of work upgrade in September , electrical energy requirements have dropped to 0.
More than 20, different cryptocurrencies and over exchanges exist worldwide. None of the cryptocurrency energy use reports or calculations account for the energy expended to develop new coins or administer services for them.
The amount of energy consumed by cryptocurrency mining will likely vary over time, assuming that prices and user adoption continue to vary. Cryptocurrency mining is a competitive process: as the value of the block reward increases, the incentives to start mining also go up. Higher cryptocurrency prices mean more energy being consumed by crypto networks. Why Cryptocurrency Mining Requires Energy The energy intensity of crypto mining is a feature, not a bug.
Bitcoin mining is the automated process of validating Bitcoin transactions without the intervention of trusted third parties like banks. The way the transaction validation process is designed uses large amounts of energy —the network depends on the computational power of thousands of mining machines. This dependency maintains the security of cryptocurrency blockchains that use proof-of-work consensus.
Environmental Impacts of Cryptocurrency Mining Calculating the carbon footprint of cryptocurrency is more complicated. Although fossil fuels are the predominant energy source in most countries where cryptocurrency is mined, miners must seek out the most inexpensive energy sources to remain profitable. Digiconomist estimates that the Bitcoin network is responsible for about 73 million tons of carbon dioxide per year—equal to the amounts generated by Turkmenistan.
Based on data through September , Ethereum produced an estimated The U. Electronic Waste Cryptocurrency mining also generates significant electronic waste, as mining hardware quickly becomes obsolete. This is especially true for Application-Specific Integrated Circuit ASIC miners, which are specialized machines designed for mining the most popular cryptocurrencies.
According to Digiconomist, the Bitcoin network generates approximately 38 thousand tons of electronic waste annually. Large-scale cryptocurrency miners are often located where energy is abundant, reliable, and cheap. But processing cryptocurrency transactions and minting new coins does not need to be energy-intensive.
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