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at accounting firm PriceWaterhouseCoopers, claims that massive amounts of e-waste will eventually be generated by outdated mining equipment, 98 percent of which he says becomes obsolete within one and a half years after their initial use.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.
FM's Editor-in-Chief Yam Yehoshua on how the newsroom evaluates stories.
FM's Editor-in-Chief Yam Yehoshua on how the newsroom evaluates stories.
FM's Editor-in-Chief Yam Yehoshua on how the newsroom evaluates stories.
FM's Editor-in-Chief Yam Yehoshua on how the newsroom evaluates stories.
Matthew Smith, Group CEO at EC Markets, speaking at FMLS:24
Matthew Smith, Group CEO at EC Markets, speaking at FMLS:24
Matthew Smith, Group CEO at EC Markets, speaking at FMLS:24
Matthew Smith, Group CEO at EC Markets, speaking at FMLS:24
Finance Magnates Annual Awards 2024 | FM Awards 2024 Highlights
Finance Magnates Annual Awards 2024 | FM Awards 2024 Highlights
🎥Catch the best moments from the Finance Magnates Annual Awards Gala Dinner!
An evening where top names in finance came together to celebrate achievements, enjoy live music, and connect over a memorable dinner. Watch the highlights and feel the energy of our first gala in Cyprus!
Congratulations to all the winners for their dedication to excellence and leadership in the financial industry, including XM, Trading PRO, FP Markets, Deriv, FxPro, LATAM, Headway, ATFX, FBS, AMEGA, EC Markets, Axi
For more information about the 1st Finance Magnates Annual Awards, visit https://bit.ly/3Zb7wNz
#FinanceMagnatesGala #IndustryExcellence #GalaHighlights #FinanceMagnatesAnnualAwards #FinanceMagnatesAwards #CelebratingSuccess #FinanceCommunity
🎥Catch the best moments from the Finance Magnates Annual Awards Gala Dinner!
An evening where top names in finance came together to celebrate achievements, enjoy live music, and connect over a memorable dinner. Watch the highlights and feel the energy of our first gala in Cyprus!
Congratulations to all the winners for their dedication to excellence and leadership in the financial industry, including XM, Trading PRO, FP Markets, Deriv, FxPro, LATAM, Headway, ATFX, FBS, AMEGA, EC Markets, Axi
For more information about the 1st Finance Magnates Annual Awards, visit https://bit.ly/3Zb7wNz
#FinanceMagnatesGala #IndustryExcellence #GalaHighlights #FinanceMagnatesAnnualAwards #FinanceMagnatesAwards #CelebratingSuccess #FinanceCommunity
FMLS:24 | Shaping the Next Era of Financial Evolution
FMLS:24 | Shaping the Next Era of Financial Evolution
Welcome to FMLS:24 – the premier event where influential brands and leaders in trading, payments, fintech, and digital assets come together!
Join over 2,500 industry professionals, engage with 150+ expert speakers, and discover endless opportunities with 70+ top exhibitors. FMLS:24 is where senior executives and decision-makers gather to close deals, forge new partnerships, and strengthen connections with long-term clients.
Whether you’re in finance, technology, or payments, this summit is your gateway to future growth, meaningful collaborations, and industry-leading insights.
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Welcome to FMLS:24 – the premier event where influential brands and leaders in trading, payments, fintech, and digital assets come together!
Join over 2,500 industry professionals, engage with 150+ expert speakers, and discover endless opportunities with 70+ top exhibitors. FMLS:24 is where senior executives and decision-makers gather to close deals, forge new partnerships, and strengthen connections with long-term clients.
Whether you’re in finance, technology, or payments, this summit is your gateway to future growth, meaningful collaborations, and industry-leading insights.
👉 Don't miss out – secure your ticket now at https://events.financemagnates.com/ZQEYy0?utm_source=youtube&utm_campaign=fmls24-awareness&utm_medium=video&RefId=MLS%3A24+Video+Promo
#fmls #fmls24 #fmevents #financemagnates #forex #payments #crypto #events #london #fintech #ai #generativeai #technology #onlinetrading #forex #investing #investors #tech
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