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Researchers explain how Bitcoin mining causes pollution

Thursday June 20 2019


This file photo taken on November 20, 2017 shows gold plated souvenir Bitcoin coins arranged for a photograph in London. PHOTO | JUSTIN TALLIS | AFP 

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A new study has found that the process of creating cryptocurrency, which makes digital transactions so much easier, is a great polluter of the planet.

According to a team of researchers from the Technical University of Munich and the Massachusetts Institute of Technology, the process of generating Bitcoin - through solving complex mathematical puzzles or ‘mining’ - uses vast quantities of electricity, which in turn leads to large carbon dioxide emissions.


According to the study, “the Carbon Footprint of Bitcoin”, published in the online journal Joule on June 12, the researchers strove to find out the environmental impact of the popular cryptocurrency.

“The use of Bitcoin causes around 22 megatons in carbon dioxide emissions annually -- comparable to the total emissions of cities such as Hamburg or Las Vegas,” says an article published on the Science Daily website.

“Although Bitcoin is a virtual currency, the energy consumption associated with its use is very real. For a Bitcoin transfer to be executed and validated, a mathematical puzzle must be solved by an arbitrary computer in the global Bitcoin network," the article states.


"The network, which anyone can join, rewards the puzzle solvers in Bitcoin. The computing capacity used in this process -- known as Bitcoin mining -- has increased rapidly in recent years. Statistics show that it quadrupled in 2018 alone."


The team, made up of management sciences and informatics researchers, began by finding out the power consumption of the network.

“In 2018, the computing power required to solve a Bitcoin puzzle increased by more than four times until October and heightened electricity consumption accordingly," states the study by Christian Stoll, Lena Klaaßen and Ulrich Gallersdörfer.

"Speculations about the Bitcoin network’s source of fuel include Chinese coal, Icelandic geothermal power, and Venezuelan subsidies."

They calculated the approximate power consumption to 45.8 terawatts, 2,120 times more than the electricity consumption of the whole of Kenya.


The methodology used  for estimating the power consumption associated with Bitcoin’s blockchain was based on initial public offerings (IPO) filings of major hardware manufacturers, insights on mining facility operations and mining pool compositions.

The researchers then translated the power consumption estimate into carbon emissions, using the localisation of Internet Protocol (IP) addresses.

Mr Stoll said the research would help policy makers realise the financial and environmental impact of the cryptocurrency.

He added that it will help them create regulations based on information, especially following the internationally agreed Paris COP21 to keep global warming below 2°C.