The cryptocurrency mining industry continues to grow daily, supported by a continuous stream of new and more efficient hardware. China is at the forefront of the industry, but as environmental concerns loom, the sustainability of their success is coming into question.
Mining chip manufacturers, the most prolific of which are based in China, work tirelessly to develop ever-more-powerful processors. With each new iteration, these high-capacity chips require more and more energy to operate. Newer mining machines render old ones obsolete, resulting in an increasing flow of electrical waste, the majority of which goes unrecycled.
Where to mine?
Little doubt remains that proof-of-work blockchain networks, like Bitcoin, are environmentally unsustainable in their current state. Computer scientist Hal Finney — believed to be one of Bitcoin’s original developers — noted the potential problem of CO2 emissions resulting from widespread Bitcoin implementation back in 2009, but was unable to offer a solution before his death in 2014.
Nowadays, the Bitcoin network has an estimated annual electricity consumption of 73.12 TWh, equivalent to that of Austria or the amount of electricity required to power 6.7 million households in the United States. The annual carbon footprint this creates is almost 35,000 kilotonnes of CO2 — or 308 kilograms for each individual transaction.
As an illustration, 1 kg of uncompressed CO2 fills approximately two standard bathtubs, and Bitcoin completes 7 transactions per second on average — that’s over 4000 bathtubs worth of CO2 created every second by the Bitcoin network.
The 2nd Annual Cryptoasset Benchmarking Study released by Cambridge University estimates that only 28% of crypto mining energy comes from renewable sources (as of December 2018).
Since Chinese mining farms contribute to approximately 60 to 70% of this energy consumption (and resultant pollution), the country is a key talking point in any discussion regarding the…