MIT researchers have performed the first Bitcoin energy consumption analysis based on empirical data. They discovered that the carbon emissions of the cryptocurrency correspond to those of Kansas City, with almost half a million inhabitants or those of a small country.
Bitcoin and other cryptocurrencies depend on blockchain technology, which allows a secure network without relying on a third party. The so-called “miners” of Bitcoin guarantee a system without fraud by validating each of them the new transactions being always online. Miners solve numerical puzzles, a process that requires huge amounts of computing power. In return, miners receive money from Bitcoin.
“This process produces immense energy consumption, which translates into an important carbon footprint,” says Christian Stoll, a researcher at the Center for Energy Markets at the Technical University of Munich, Germany, and the Center for Energy Policy Research and Environmental of MIT.
Scientists are increasingly worried about Bitcoin mining, as the computing power required to solve a Bitcoin puzzle has multiplied by four in a single year and will be increasing.
“Our model reflects how the connected computing power and the difficulty of Bitcoin search puzzles interact providing high accuracy of energy consumption estimation,” says Stoll.
Using this model, Stoll and his team estimated Bitcoin’s annual energy consumption at 45.8 terawatt hours. This allowed them to calculate an annual range of carbon emissions between 22.0 and 22.9 megatons of CO2. However, the researchers estimate that energy consumption would double if they included all other existing cryptocurrencies.
“We don’t question the efficiency gains that blockchain technology could provide,” says Stoll, “however, the current debate focuses on anticipated benefits, and more attention should be paid to costs.”
The money of the future could be mortgaging it without knowing it. Undoubtedly, cryptocurrency should be considered in climate change mitigation efforts.