Bitcoin carbon footprint – Lado Okhotnikov, Margaret Osborne and Nathan Reiff citations

Mining energy consumption data

The global energy consumption by bitcoin miners in 2021 hit a new record of 78 TWh (terawatt hours) and surpassed last year’s peak of 67 TWh per year. According to Bloomberg by the end of 2021 up to 121 TWh were consumed for total cryptocurrency mining. This puts bitcoin on par with the whole country – Argentina or Pakistan consumes the same amount of energy per year.

Cryptocurrency mining requires electrical power. According to experts, consumption in this area will only grow as cryptocurrency is being used increasingly. And the miners’ reward is decreasing. To mine more you need to spend more power.

Energy consumption in 2021

Country	TWh/year
China	7714
United States	3869
India	1355
Russia	963
Japan	916
Brazil	579
Canada	562
South Korea	553
Germany	503
France	441
Saudi Arabia	321
Italy	300
Cryptocurrency of all	121
Argentina	121
UAE	113
Netherlands	109
Kazakhstan	85
Belgium	83
Chile	79
Bitcoin	78
Colombia	76
Kuwait	73
Algeria	72

Will it lead to an energy collapse?

A team of researchers at the Cambridge University calculated that mining takes about 121.36 TWh (terawatts) per year.

This exceeds the energy consumption of entire countries: Argentina (121 TWh), the Netherlands (108.8 TWh) and the United Arab Emirates (113.2 TWh) and is also almost comparable to Norway, which consumes 122.2 TWh of electrical power per year.

The annual amount of energy spent on mining would be enough to power all electric kettles in the UK for 27 years or to supply the entire Cambridge University for 688 years.

Most of the power that goes into mining goes into bitcoin mining. If we talk about the carbon footprint of this phenomenon, it is equivalent to releasing 7.6 million tons of carbon dioxide into the environment. This is how much exhaust gas a middle-class car emits which travels a path of 43.6 billion kilometers.

Is bitcoin mining profitable?

A German mathematician Moritz Strube made calculations for Germany and found out that mining does not pay for itself due to the too high price of electricity. In the country, one kWh costs 29 euro cents. If all mining equipment were located in Germany then 4.22 billion euros would have to be paid for electricity per year. Due to the constant halving – reducing the reward to miners for adding a new block to the blockchain two times – 328,500 new bitcoins are mined per year. It happens about once every four years. Thus, mining is unprofitable in Germany.

High electricity prices in the EU are forcing users to locate farms in other countries. This is also influenced by the climatic factor. For example, in Iceland 1 kWh is relatively cheap – only 10 euro cents. In addition, the country is quite cold. Therefore, you can spend less on cooling farms. In Venezuela, local residents are actively buying video cards: inexpensive electricity allows you to earn from $3,000 a month, which is a lot of money for a poor country.

According to various estimates, miners spend about 10% of their profits on electricity bills. The operation of the mining farm requires various devices and electricity is needed around the clock. Calculations that reveal transaction blocks require uninterrupted power supply for video cards, processors and ASIC equipment as well as a cooling system.

China is an industry leader

Most energy consumption and mining revenues come from China. Two-thirds of all coins are mined in China. This happens in a country where the main energy source for electricity is coal. There are six largest mining pools in China. Four Chinese provinces have already completely banned mining on their territory; the official reason for the ban was too high-energy consumption.

However, Chinese miners did not stop and went to the southwestern provinces where the price of electricity is less than in the northern regions. The forecasts of Chinese scientists from Tsinghua University and British scientists from the University of Surrey are alarming: China’s energy consumption could peak as early as 2024 with carbon dioxide emissions of 130 million tons. Then mining in China will outstrip the energy consumption of entire countries such as Italy and Saudi Arabia.

The mining share in the total digital pie

All global digital activity consumed more than 3,000 TW in 2021. Bitcoin mining takes a share of no more than 2%. Much more is consumed, for example, by banks and trading platforms that train their trading and scoring bots. Also, a lot of energy is spent on the elements of a digital concentration camp. I am sorry I meant public security systems – video surveillance, face recognition, mobile phone tracking, etc.

Humankind needs a lot of new clean energy

We have just dispelled the myth that mining is the main environmental problem of our time. Yes, the energy consumption will increase in the future but it has nothing to do with mining. It is because the population living standard and the population itself are growing. Technology is moving forward and mankind needs energy. This has been talked about for a long time. We need clean energy, a lot of it. And this is exactly what you need to be worried about.

What cryptonomists think

Nathan Reiff, Resident Conductor, Harvard Glee Club*

Cryptocurrency mining also generates significant electronic waste, as mining hardware quickly becomes obsolete. This is especially true for Application-Specific Integrated Circuit (ASIC) miners, which are specialized machines designed for mining the most popular cryptocurrencies. According to Digiconomist, the Bitcoin network generates approximately 38 thousand tons of electronic waste annually.

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Margaret Osborne, freelance journalist based in the southwestern U.S., Sag Harbor Express, WSHU Public Radio*

To calculate the impact of mining, the researchers looked at the number of bitcoins mined daily between 2016 and 2021. They considered the amount and type of energy the miners used, as well as their locations to estimate the emissions per coin, per New Scientist.

Using the social cost of carbon, a common metric to gauge the financial damages caused by the greenhouse gas, the researchers calculated the climate cost of Bitcoin. On average, they found that for each dollar in bitcoin value produced, the process resulted in 35 cents in global climate damages—or 35 percent of its market value. In comparison, beef’s climate damages clocked in at 33 percent of its market value, and damages from gasoline produced from crude oil were at 41 percent.

In May 2020, Bitcoin’s damages peaked at 156 percent of coin price, per the study.

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Lado Okhotnikov, CEO of Meta-force.space, (former CEO of Forsage.io)*

Yes, mining requires energy and special electronic equipment. And all this – power generation and computers manufacturing has its negative impact on the environment. This is true: any anthropogenic activity affects nature.

“There are much more hazardous and harmful industries – total deforestation or uranium mining by underground leaching. Even ordinary agriculture in the hands of profit-hungry businessmen has turned into environmentally destructive production,” Lado Okhotnikov repeats in his article.

The goal should not be focused on finding the one to blame. It is a matter of approach. It is necessary to be able to rationally use resources and repay debts to nature. Give it a chance to recover. The nature will recover anyway, the main question if it happens with humankind or already without it. We need to find a balance and a human approach.

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