Energy Cost of mining Bitcoin is more than cost of mining gold and copper combined
A high school student hailing from a small town in India on Monday, November 5 threatened to blow up the Miami airport after the Federal Bureau of Investigation (FBI) refused to help him recover the Bitcoins he lost to a US-based fraudster. Needless to say that the wild craze surrounding the cryptocurrency is not over yet despite it momentous fall last December. While this incident may have alarmed both FBI and India's National Investigation Agency (NIA), new research suggests that we have more to worry about Bitcoin than a teenager gone rogue.
According to a new study, mining Bitcoin consumes more than twice the energy consumed by mining Gold and Copper combined. These numbers are identical for other popular cyrptocurrencies like Ethereum, Litecoin and Monero. For reference, mining of a cryptocurrency is a computational process in which a network confirms the transaction and a new block is added to the public ledger called the blockchain. The individual who uses computational power to add a new block to the ledger gets a cryptocurrency as a reward for their efforts.
Researchers from the Oak Ridge Institute in Cincinnati, Ohio, found out that Bitcoin, Ethereum, Litecoin and Monero consumed an average of 17, 7, 7 and 14?million Joules of energy to generate 1$ respectively. On the contrary, the conventional mining of aluminum, copper, gold, and platinum and consumed just 122, 4, 5, and 7 million Joules of energy to generate 1$, respectively. This indicates that (with the exception of aluminum) mining of cryptocurrencies consumes more energy than mining minerals to produce an equivalent market value.
Notably, mining cryptocurrencies not only consumed a lot of energy i.e. electricity as cryptocurrency mining requires computational power, but it also lead a bigger carbon footprint. To account for the fluctuations in the pricing of the cryptocurrencies, the researchers limited their research time period from 1 January 2016 to 30 June 2018. They found out that during the mentioned time period, mining for all the four cryptocurrencies was responsible for 3 to 15 million tonnes of carbon-di-oxide emissions. They also found out that a cryptocurrency mined in China would generate four times the amount of carbon-di-oxide compared to virtual currency mined in Canada.
In the long run, viability of the crytocurrencies in the market will not only depend on their environmental impact but also on their energy consumption.