Carbon Heavy Money: How Bitcoin Maybe Accelerating Global Warming

 

Bitcoin Is Viewed As Dirty Currency.

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The problem is cryptocurrency mining ‘farms’, which are usually large spaces housing computers dedicated to mining the coins; sometimes, these farms will have thousands of computers all working simultaneously to increase profitability. This process requires an enormous amount of computing power and thus tends to consume immense amounts of energy. The result of this is that bitcoin-mining operations are constantly chasing cheap electricity. Cheap electricity can be found in China, which now accounts for more than 75% of bitcoin mining around the world. The problem with this is that coal and other fossil fuels are currently a major source of electricity worldwide, with two-thirds of all power plants globally burning fossil fuels for energy.

“Bitcoin alone consumes as much electricity as a medium-sized European country,” says Professor Brian Lucey at Trinity College Dublin. “This is a stunning amount of electricity. It’s a dirty business. It’s a dirty currency.”

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It’s More Than Just Energy Consumption

The high turnover of these specialized machines creates a lot of electronic waste, electronic products which have reached the end of their usefulness. ASICs serve no other purpose than to mine cryptocurrencies, so when they can no longer mine them profitably, they cease to serve a purpose. According to a new analysis by economists from the Dutch central bank and MIT, because of the high churn of these machines, a single bitcoin transaction creates the same amount of electronic waste as throwing away two iPhones. There were 253,000 transactions last month.

De Vries and Stoll write in the paper, “We estimate that the whole bitcoin network currently cycles through 30.7 metric kilotons of equipment per year. This number is comparable to the amount of small IT and telecommunication equipment waste produced by a country like the Netherlands.”

Countries Are Starting To Take Notice

In Malaysia, police seized and destroyed more than 1000 bitcoin mining rigs by crushing them with a steamroller after the miners had allegedly stolen almost $2 million worth of electricity to power their machines. The miners were charged with stealing energy.

A lot of Chinese mining operations that have been shuttered are relocating to neighboring Kazakhstan. The move might be short-lived, however, as a new law signed by the president will introduce extra taxes for crypto miners starting in 2022, making the country less attractive for miners.

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Sources: The New Yorker, CNBC, The Guardian

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