Researchers have conducted the first analysis of Bitcoin power consumption based on empirical data from IPO filings and localization of IP addresses. They found that the cryptocurrency’s carbon emissions measure up to those of Kansas City–or a small nation. The study, published June 12 in the journal Joule, suggests that cryptocurrencies contribute to global carbon emissions, an issue that must be considered in climate change mitigation efforts.
Bitcoin and other cryptocurrencies rely on blockchain technology, which enables a secure network without relying on a third party. Instead, so-called Bitcoin “miners” guarantee a system without fraud by validating new transactions. Miners solve puzzles for numerical signatures, a process that requires enormous amounts of computational power. In return, miners receive Bitcoin currency.
“This process results in immense energy consumption, which translates into a significant carbon footprint,” says Christian Stoll, a researcher at the Center for Energy Markets at the Technical University of Munich, Germany, and the MIT Center for Energy and Environmental Policy Research.
Scientists have growing concerns that Bitcoin mining is fueling an appetite for energy consumption that sometimes draws from questionable fuel sources–such as coal from Mongolia–in addition to hydropower and other low-carbon power resources. And cryptocurrency’s energy issues seem to only be getting worse, with the computing power required to solve a Bitcoin puzzle increasing more than four-fold in 2018. While there is a growing push among researchers to quantify Bitcoin’s energy consumption in order to better understand its contribution to global climate change, recent studies have struggled to generate accurate estimates.
“We argue that our work goes beyond prior work,” says Stoll. “We can provide empirical evidence where current literature is based on assumptions.”
Stoll and his team used IPO filings disclosed in 2018 by all major mining…