It takes more energy to produce $1 worth of Bitcoin or Monero than $1 worth of copper or gold, 17 megajoules for virtual mining versus 9-14 MJ for physical mining processes (rare metals, precious metals, gold, and copper). Max Krause and Thabet Tolaymat authors of the groundbreaking study “Quantification of energy and carbon costs for mining cryptocurrencies” have estimated that since cryptocurrency’s initial hay day two and a half years ago major networks have produced anywhere between 3-15 million tons of carbon emissions.
What makes some cryptocurrencies more energy intensive to mine than others? The carbon footprint of transaction verification on a blockchain network depends on the location where the coins are generated. Those coins mined in China generate four times more carbon emissions than Canada where electricity is mostly hydropower.
Crypto miners ramp up their computing power to win digital rewards for making calculations that help to verify the transactions. Anyone has access to mining as long as they have the proper equipment. The bigger the rig the better your chances, the bigger the rig the more energy intensive.
There are not only individual miners with souped-up computers, but there are also entire mining facilities that have other energy needs like cooling systems and electricity for the build itself. These additional consumption costs are not currently measurable.
Is there a solution beyond ditching cryptocurrency? Yes, to eliminate the mining process that is a necessary step to completing proof-of-work (PoW) based blockchain transactions. PoW is the protocol for the most popular cryptocurrency, Bitcoin. Many blockchains are now Proof-of-stake (PoS) or like Ethereum (the second largest cryptocurrency) are transitioning to consensus mechanisms that don’t incentivize miners to use more computational resources.
The crypto community has been quick to recognize the large-scale environmental impact and has already begun efforts to remedy it. That said, it might just be too late. Blockchain’s ability to be a more sustainable option has yet to be seen. Amidst the environmental crisis of global warming we currently face, it is crucial that the blockchain industry become a solution to rising temperatures and sea levels, not another part of the problem.
