If there is one thing that can be said about Bitcoin mining, it is a polarizing topic. On the one hand, we have Canada making moves towards using it to provide heat to its cities. On the other, there is China’s increasing pressure on stopping the practice altogether. Although drastically different in their approach, it seems, however, that these actions are motivated by the same goal – that is mitigating the environmental impact that Bitcoin mining seems to have.
The carbon footprint of cryptocurrencies has been considered a problematic issue for a relatively long time, but it seems that right now, some actual steps are finally being taken. However, a question lingers in many people’s minds – how big of an impact is it, really?
We have created this tool with the hope that it can help you understand the scale of the issue and shed some light on the energy consumption of cryptocurrency mining. Its multiple settings allow you to compare the energy footprint, carbon emissions, and even the overall climate impact of some of the more important cryptocurrencies with that of real metal extraction, and give you a scalable picture of what it actually means to generate the value of $1 via bitcoin mining.
What’s the deal with Bitcoin mining?
First things first – have you ever wondered what Bitcoin mining actually means? If you’re not already invested in the subject, chances are that you’ve heard the term thrown around here and there, but you’ve never had an opportunity to really delve into its meaning. If that’s the case, you’ll find a short explanation in this paragraph.
Essentially, Bitcoin mining is the process of creating bitcoins by means of solving complicated mathematical problems, such as finding a code (called: The key) from 2256 possibilities. Wait… Can you imagine? A set of numbers from 1.1579209 × 1077 combinations? Once somebody finds the key, the transaction is considered verified and gives new bitcoins as a reward to the party who resolved the puzzle. That’s how new bitcoins come into circulation.
So what’s the catch? Well, it’s pretty simple. The problems that are solved to extract bitcoins are so complex that they require massive amounts of computing power; thus, electricity. Mining machines (application-specific integrated circuits, or ASICs) consume so much power that, if relying on fossil fuels, they can cause significant air pollution which, in the age of raising awareness about global warming, has led to some major controversies. On top of that, it has been noted that given the relatively short lifespan of most dedicated machines, crypto mining can generate quite a lot of electro-waste.
Bearing all that in mind, it’s really no wonder that bitcoin mining has been facing a lot of backlash. Action to mitigate its negative impact on the environment is finally being taken – although some are significantly more drastic than others.
How does this calculator work?
It’s nice to talk about the impact of bitcoin in all these abstract terms and all, but you wouldn’t be here if you weren’t interested in numbers. Let’s get to the nitty-gritty – our cryptocurrency footprint calculator will allow you to get some measurable perspective on the issue by comparing the effects of crypto mining with some real, physical mining industries, as well as placing them in context.
The calculator has three main operating modes:
● Energy footprint;
● Carbon footprint; and
● Climate footprint.
With the energy footprint mode, you can see how much energy is actually required to generate 1 USD through a particular cryptocurrency network. Would you believe that in 2021, the energy needed to gain one $1 in BTC would be enough to power an average household for almost 4 hours?
If you choose the carbon footprint mode, you will see the CO2 emission of any given cryptocurrency, depending on the region.
In the climate footprint mode, the calculator will show you an estimation of climate damages shown in American dollars.
On top of the main three modes, the calculator has several options you can choose from, such as the cryptocurrency, time period to consider, etc.
So is it all bad?
The data about the carbon emissions and other “hidden” costs of cryptocurrencies can be pretty staggering. What’s more, it seems that it might be impossible to cut it short completely. After all, bitcoin and other crypto-mining is a vast machine that will not be easy to stop after being put into motion, and attempts to do so result mainly in the relocation of mining farms rather than getting rid of them. However, it doesn’t mean that nothing can be done.
It is possible that crypto can be made greener. Such attempts are even taking place right now! For example, many countries aim to switch to renewable energy sources for fueling mining machines, which can lead to a significant change for the better.
And let’s not forget that cryptocurrencies have several positive effects, too. It can’t be all bad if it got so huge! Some of the more prominent bright sights of crypto’s development include:
● The overall positive impact on the tech industry, for example, by creating new professions and positions.
● Safer transactions and significantly lower risk of financial scams.
● Eliminating problems with payments between different countries – crypto is borderless.
● The possibility to substitute bank accounts in countries with unstable banking systems.
And many, many more! So while it’s important to keep the environmental impact of crypto in mind, let’s not overlook all the positive sides that come with it. Instead, let’s hope and work together for safer, cleaner processes in the future!
Please note that the results shown by the calculator are not 100% accurate. The tool uses data collected over a 900+ days period, which is then averaged, meaning that the numbers returned are close approximations.
The calculator is based on the following sources:
● Gallersdörfer, Ulrich, Lena Klaaßen, and Christian Stoll. “Energy Consumption of Cryptocurrencies beyond Bitcoin” Joule 4, no. 9 (2020): 1843–46.
● Goodkind, Andrew L., Benjamin A. Jones, and Robert P. Berrens. “Cryptodamages: Monetary Value Estimates of the Air Pollution and Human Health Impacts of Cryptocurrency Mining” Energy Research & Social Science 59 (2020): 101281.
● Krause, Max J., and Thabet Tolaymat. “Quantification of Energy and Carbon Costs for Mining Cryptocurrencies” Nature Sustainability 1, no. 11 (2018): 711–18.
● Mudd, By Gavin. “Sustainability Reporting and the Platinum Group Metals: A Global Mining Industry Leader?” Platinum Metals Review 56, no. 1 (2012): 2–19.
● Ricke, Katharine, Laurent Drouet, Ken Caldeira, and Massimo Tavoni. “Country-Level Social Cost of Carbon” Nature Climate Change 8, no. 10 (2018): 895–900.
● Tost, Michael, Benjamin Bayer, Michael Hitch, Stephan Lutter, Peter Moser, and Susanne Feiel. “Metal Mining’s Environmental Pressures: A Review and Updated Estimates on CO2 Emissions, Water Use, and Land Requirements” Sustainability 10, no. 8 (2018): 2881.
● Online DBs: Blockchain, Etherscan, nicehash, bitinfocharts, asicminervalue.
The article is written by Rahul Dhari and Arturo Barrantes