Is Bitcoin Mining good for the environment?
What Is Bitcoin Mining?
According to Bankrate:
Bitcoin mining is the process of creating new bitcoins by solving extremely complicated math problems that verify transactions in the currency. When a bitcoin is successfully mined, the miner receives a predetermined amount of bitcoin.
Bitcoin mining is a process that creates new Bitcoins and releases them into circulation.
Below is an image explaining Bitcoin mining according to investopedia:
Imagine Bitcoin is a giant public record book, called a blockchain, where everyone can see all the transactions. Bitcoin mining is like being an accountant for this book, but with a twist.
Here’s how it works:
- Transactions: Whenever someone sends or receives Bitcoin, it’s like a new entry in the book. But how do we know it’s legit?
- Mining: This is where miners come in. They use powerful computers to solve complex math puzzles. The first miner to solve a puzzle gets to verify a bunch of recent transactions and add them as a new “block” to the record book.
- Reward: As a thank you for their work, the miner is rewarded with a certain amount of Bitcoin. This is how new Bitcoins are created!
Bitcoin mining rewards over time
The current Bitcoin mining reward is 3.125 BTC per block, and it shrinks by half roughly every four years.
The environmental impact of Bitcoin Mining
Bitcoin requires energy, equipment, internet, and a global networking infrastructure to be useful. Thus, it has a large environmental impact, with some using as much energy as small countries to maintain a blockchain. There are even concerns about Bitcoin’s water footprint. The largest country for Bitcoin mining is the United States, which accounts for 37.84% of Bitcoin mining activities. Over 77 kilotons of electronic waste are annually produced as a byproduct of Bitcoin mining.
The Cambridge Bitcoin Electricity Consumption Index estimates that Bitcoin, the most widely-mined cryptocurrency network, uses an estimated 140 Terawatt-hours (TWh) of electricity annually (0.63% of global electricity use) and about 352 TWh of energy (0.22% of global energy production) at the point of production — more than Pakistan and Ukraine, using the latest country energy estimates from 2019.
Due to the heat generated by mining machines, miners, manufacturers, and maintainers have turned to water cooling to reduce the costs of keeping equipment cool. In some cases, large mining farms have discharged hot or warm water into lakes or other water bodies, raising concerns about raising the average temperature of or contaminating these bodies with a continuous discharge.
The impact of Bitcoin mining on the environment is a growing concern. The process of mining Bitcoin requires a lot of energy, and the majority of this energy comes from fossil fuels. This means that mining is a significant contributor to greenhouse gas emissions.
Here are some of the environmental impacts of Bitcoin mining:
- Energy consumption: Bitcoin mining requires a lot of energy, and the majority of this energy comes from fossil fuels. This means that mining is a significant contributor to greenhouse gas emissions.
- Water consumption: The mining process also consumes a lot of water. This is because the miners need to be cooled, and water is often used for this purpose.
- Noise pollution: The mining process can also lead to noise pollution. This is because the miners are often located in large warehouses or data centers, and the fans and other equipment can be very loud.
- E-waste: The mining process also produces a lot of e-waste. This is because the miners are constantly being upgraded, and the old miners are often discarded.
Annualized Total Bitcoin Footprints
There are a number of things that can be done to reduce the environmental impact of Bitcoin mining. These include:
- Using renewable energy sources: One way to reduce the environmental impact of Bitcoin mining is to use renewable energy sources to power the mining process.
- Switching to more efficient mining algorithms: Another way to reduce the environmental impact of mining is to switch to more efficient mining algorithms. These algorithms use less energy to solve the mathematical problems that are used to verify Bitcoin transactions.
- Mining in more sustainable ways: There are a number of more sustainable ways to mine Bitcoin. These include mining with renewable energy sources, mining in cold climates, and mining in areas with low electricity costs.
In conclusion, Bitcoin is actually driving growth in renewable energy development and making use of excess energy in areas like natural gas where storage can be an issue.
