Bitcoins rise could leave a carbon footprint the size of London

 Bitcoin's rise could leave a carbon footprint the size of London

According to research, the rise in the price of bitcoin since early 2021 could result in the cryptocurrency having the same carbon footprint as London.

Alex de Vries, a Dutch economist, created the Bitcoin Energy Consumption Index, one of the first systematic attempts to measure energy use on the Bitcoin network. By the end of 2017, he estimated that the network was using 30 terawatt-hours (TWh) per year, the same as the rest of Ireland.

De Vries estimates that the network uses more than two - and possibly three times - as much energy: 78 to 101 TWh, or about the same as in Norway.

New bitcoins are created by mining coins, which is done using computers to perform complex calculations. The more bitcoins, the longer it takes to mine a new coin and the more electricity is used in the process.

De Vries estimates that roughly 60% of the cost of mining bitcoin is the price of the electricity used. The more money miners get for Bitcoin, the more they can spend on mining it.

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However, energy consumption often lags behind currency fluctuations due to the time it takes for Bitcoin miners to acquire new hardware. De Vries writes that energy consumption is likely to rise significantly in the short term as a result of the recent rise in currency prices as new and established miners invest more in hardware.

Bitcoin consumes as much energy as entire European countries.

Since 60% of this revenue is used to pay for electricity, at a price of $ 0.05 per kWh [kilowatt-hour], the entire network can consume up to 184 TWh per year, estimates De Vries.

This energy consumption is about the same as the 200 TWh consumed by every data center for every other digital industry around the world. The size of Bitcoin's electrical footprint means that carbon emissions are significant.

The document suggests that for every kWh consumed, 480-500 g of carbon dioxide are generated. A total energy consumption of 184 TWh would result in a carbon footprint of 90.2 million metric tons of CO2,writes De Vries in Joule magazine, which is roughly comparable to the carbon footprint of the London metropolitan area.

For example, in addition to consuming electricity, bitcoin miners need access to powerful computers, preferably including specialized chips designed for mining. To produce 1 million of these computers, the largest supplier Bitmain would have to use the monthly capacity of one of the two chip manufacturers in the world capable of producing such powerful silicon compounds, potentially crowding out demand from other sectors such as AI, transportation and consumer electronics.

Bitcoin's rise could leave a carbon footprint the size of London

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