According to new research, a single Bitcoin transaction’s e-waste is equivalent to throwing two iPhones into the trash.
Alex de Vries and Christian Stoll, economists from the Dutch central bank and the Massachusetts Institute of Technology (MIT), respectively, published a report on Bitcoin in the Resources, Conservations, and Recycling journal.
E-waste covers any discarded electronic and electrical equipment and associated pollutants from its disposal or creation.
The research concludes that for each Bitcoin transaction, 272 grams (0.6 pounds) of e-waste is generated when taking into account equipment used for mining. Bitcoin’s annual e-waste level is 30.7 metric kilotons annually — comparable to the small IT equipment waste of the Netherlands. That figure could rise to 64.4 metric kilotons a year.
Why Is Bitcoin Energy Intensive?
Bitcoin is the world’s most famous and valuable digital currency, also called a cryptocurrency. Its market value is over $800 billion at its current value (September 2021). At the same time, Cryptocurrencies have a market value in the range of $2 trillion. Currently, there are more than 7,000 cryptocurrencies listed on the popular crypto price comparison site, Coinmarketcap.com
There will only ever be 21 million Bitcoins mined, with almost 19 million already mined, scarcity is pushing up the price. Bitcoin’s value is high and fluctuates rapidly, rising and falling dramatically between $27,000 and around $65,000 in the last 12 months.
Bitcoin’s digital coins are “mined” by computers. Bitcoin transactions are grouped in blocks. To ensure transactions are safe, miners use powerful computers to solve complex math problems. The first computer to win the block’s math puzzle race is rewarded with valuable Bitcoin as payment.
People rig up specialist computers, called ASICs, that only solve the Bitcoin riddle in an attempt to garner a valuable coin. The ACIS mining machines and their specialized chips cannot be repurposed — they can only mine Bitcoin.
Faster, more powerful computers often come to market, and miners constantly replace aging ASICs. The demand for hardware and semiconductors could also lead to a global shortage as more people mine. ASICS soon become obsolete — the report states after 1.29 years — generating a heavy e-waste trail.
Why Is E-Waste Part of the Bitcoin Conversation?
The power required to run the ASIC mining is immense, and experts speculate it may increase.
There were 112.5m Bitcoin transactions in 2020. The mining rig construction, running requirements, and recycling means that each transaction generates a total of 272g of e-waste, the weight of two iPhone 12 minis.
How Much Electricity Does Bitcoin Use?
Bitcoin’s energy use has come under scrutiny before. It’s estimated its total electricity consumption is roughly 100 Terawatt hours a year.
If Bitcoin were a country, it would be in the top 30 for electricity consumption, ahead of Argentina.
Are Cryptocurrencies Increasing Global Emissions?
It is hard to measure cryptocurrency emissions. Bitcoin miners defend their position by saying they use renewable energy or tap into energy that would otherwise be wasted.
Estimates vary: some say 39% of Bitcoin’s mining energy comes from renewable sources, while others calculate it’s as much as 74.1% is renewably sourced.
China, the world’s leading Bitcoin mining country, has colossal hydropower capabilities. The rural Sichuan and Yunnan regions create enormous surplus renewable energy during their rainy season. Battery technology isn’t advanced enough to capture excess energy, and the local population cannot use it all.
Instead of the energy going to waste, Bitcoin miners make the most of conditions. China accounts for 10% of global Bitcoin mining in the dry season, and rising significantly in the wet season.
Some crypto industry participants have launched a campaign and pledge to emit net-zero emissions by 2030. New ways to process transactions, such as proof of stake, may also revolutionize mining and energy use.
Other entrepreneurs have spotted gaps in the market. Polluting industries can reuse waste such as flared natural gas to create electricity to power mining rigs.
Cryptocurrency Candela requires solar-powered mining as part of its solar power business model. Candela encourages people to sell their home’s excess solar power to neighbors.
Which Regions Are Welcoming Bitcoin?
Famously, El Salvador has officially adopted Bitcoin as legal currency. The central American country imports 69% of its energy requirements as fossil fuels. However, around two-thirds of its electricity grid comes from renewables, meaning Bitcoin will be pretty “green” in El Salvador.
Texas’ electricity grid allows Bitcoin miners to use electricity during low energy demand times and turn off when power demand peaks. Miners estimate that helps them mine 1 Bitcoin, current value around $40,000 per coin, for around $2,000.
Bitcoin and E-waste Debates to Roll Onwards
Bitcoin’s existence and inherent value continue to be much debated. Up until now, society has put a value on Bitcoin, and that looks set to continue.
The success of cryptocurrencies coupled with increased awareness of global warming means digital coins will come under greater inspection. Avoiding e-waste could equally be as hot a topic.
Opinion writer: Tom Shearman
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