Though an entirely virtual currency, the CO2 emissions associated with the use of cryptocurrency are real – and comparable to Las Vegas and other large cities, according to a recent Technical University of Munich study. Based on a variety of data – including hardware manufacturers and Bitcoin miners – the study found that Bitcoin is responsible for roughly 22 megatons of CO2 emissions per year, as much as a large modern city.
Part of the responsibility lies with the Bitcoin mining process. A Bitcoin transfer is based on solving a mathematical puzzle – an operation which is completed by a random computer in the Bitcoin network, known as a miner. Since miners get rewarded in Bitcoin for solving these problems, more and more internet users have decided to join the Bitcoin network in recent years – with a fourfold increase in 2018 alone.
Bitcoin Farming, The Main Culprit
The new TUM study undertook a detailed calculation of the Bitcoin-related carbon emissions by factoring in a wide range of aspects. One of the first indicators is the power consumption of the Bitcoin network, which is directly related to the hardware used by the miners.
The research analyzed the energy consumption of both individual miners and large-scale Bitcoin farms – multi-computer assemblies created specifically for the purpose of Bitcoin generations. “In those operations, extra energy is needed just for the cooling of the data center”, explains Christian Stoll, a researcher with the Technical University of Munich and the Massachusetts Institute of Technology.
The research found that the annual electricity consumption by the Bitcoin network is approximately 46 TWh. Calculating the amount of CO2 emitted by this energy requires additional data research and analysis – including live Bitcoin mining data tracking.
Bitcoin Mining Localization & CO2 Emissions
By localizing the Bitcoin farms and adjusting them to the average carbon intensity of power generation in those specific areas, the researchers were able to get a relatively accurate estimate of the CO2 emissions related to Bitcoin.
The researchers found that 68 percent of the Bitcoin network was located in Asia, 17 percent in Europe, and 15 percent in North America. Based on these figures, the overall carbon footprint of the Bitcoin system is estimated at between 22 and 22.9 megatons per year – comparable to large cities like Las Vegas, Hamburg or Vienna.
According to Stoll, the results suggest that regulating cryptocurrency mining may be required in certain areas: “Naturally there are bigger factors contributing to climate change. However, the carbon footprint is big enough to make it worth discussing the possibility of regulating cryptocurrency mining in regions where power generation is especially carbon-intensive,” says Stoll. “To improve the ecological balance, one possibility might be to link more mining farms to additional renewable generating capacity.”