Bitcoin and other cryptocurrencies have been chastised for the amount of e-waste they produce and the amount of energy they use to mine coins. Now, a study has attempted to quantify the environmental impact of Bitcoin mining.
Bitcoin mining produces 30.7 kilotons of e-waste each year, according to a study by StockApps.com. That would cover Luxembourg’s e-waste five times over. Luxembourg is a country with a population of 6,00,000 people.
Cryptocurrencies have been chastised for being inefficient for a long time. This is particularly true for major cryptos such as Bitcoin and Ethereum. Although solutions to reduce the environmental impact of mining these cryptocurrencies are being developed, there is still a lot of room for improvement.
To control the creation of new blocks and the overall state of the cryptocurrency, Bitcoin employs a ‘proof of work’ (PoW) mechanism. On the other hand, ‘proof of stake’ (PoS) uses a simple mechanism to lock coins in a smart contract, and owners stake their coins through a lottery system.
PoW has long been chastised for using more energy than PoS. PoS proponents also argue that it is more secure than PoW, so there is little reason not to use it.
Bitcoin is estimated to consume 127 terawatt-hours of electricity per year, which is equal to Norway’s entire annual electricity consumption.
Bitcoin mining is expensive even on a per-transaction basis: a single coin of BTC consumes 707 kilowatt-hours of electricity, which is 11 times that of Ethereum.
The more difficult mining process for Bitcoin has an impact on mining equipment, which is why it generates so much e-waste.
Application-specific integrated circuits (ASICs) are used by bitcoin miners to mine the cryptocurrency because they are specifically designed for this purpose. ASICs, on the other hand, have a short lifespan of about 18 months, after which they become e-waste.
There are two ways to help Bitcoin’s environmental impact be reduced.
The first option is to switch from the current PoW mechanism to PoS, which experts believe will result in significant energy savings.
The adoption of a pre-mining mechanism, such as that used by XRP, is another solution being proposed. Instead of generating coins on demand, this system would allow algorithms to mine new coins. Experts believe that this will reduce the demand for high-end mining equipment, thereby reducing e-waste.