As the price of Bitcoin rose, so did the number of people who bought cryptocurrency mining equipment in hopes of "striking it rich." With all these miners running their equipment night and day, the total electrical usage of cryptocurrency mining operations has grown at a staggering rate. Even some of cryptocurrency's biggest cheerleaders now ask, is bitcoin mining worth the possible cost to the environment?
For even those who've followed Bitcoin in the news, the process of mining can be confusing. Essentially, new Bitcoins are made when computers find the answer to a complex math problem. These math problems don't have any practical use outside of gaining bitcoin, the process of using computational power to solve math problems is simply a logical way for new bitcoin to be distributed. However, there is a finite amount of bitcoin and with even new bitcoin minted, the problems become more difficult and require more time and computational resources. With so many new miners, the difficulty has increased with lots of miners working for less and less bitcoin.
Currently, bitcoin mining consumes a staggering 2.55 gigawatts of electricity per year. In comparison, the entirety of Ireland uses about 3.1 gigawatts of electricity every year.
Unfortunately, experts like Alex De Vries expect the energy usage to further drastically increase. De Vries published a paper in which he found that it takes about 300 kwH of energy to mine one bitcoin. With the increase in miners and math problem difficulty, that number could reach a shocking 900 kwH per bitcoin by 2019.
Is it worth it?
Bitcoin is celebrated by its supporters as an answer to many of the financial and banking problems that the world today faces, but is such a drastic electrical use and environmental damage worth bitcoin's benefits?
De Vries believes that bitcoin is damaging to the Earth's environment but entrepreneur Marc Bevand believes that the increase in the number of miners will only bring about more innovation in the cryptocurrency world.
Bevand stated that "Because miners are so sensitive to electricity prices, they are often a driver pushing utilities to further develop renewables which are now the cheapest source of energy. For example in China, many miners are located in the Sichuan province because of its abundant hydroelectricity. Another example is an Australian entrepreneur who is building a 20 megawatt solar-powered mining farm."
Bitcoin and other cryptocurrencies are a revolutionary new technological concept that has the power to completely change many crucial industries. However, due to the large environmental cost of Bitcoin miner's, many say that it is not worth it. Only time will tell whether Bitcoin is worth the environmental damage.