“Bitcoin uses more electricity per transaction than any other method known to mankind,” Bill Gates told the New York Times stirring up the conversation on the impact cryptocurrencies have on the environment.
A week later, the Bank of America revealed its research that confirmed what Gates was saying. The report states that the cryptocurrency consumes more power than some of the largest companies in the world, such as American Airlines, which flies more than 200 million passengers a year.
Its energy consumption is on a par with the US federal government (2 million employees), while countries like Argentina (population: 45 million), Greece (population: 11 million), and New Zealand (population: 5 million) consume less energy than Bitcoin on a yearly basis.
For every $1 billion worth of Bitcoin, the same amount of energy is spent as the amount required to power 1.2 million automobiles. Furthermore, the purchase of a single BTC at the current rate (over $58,000) creates a carbon footprint of more than 270 tons, which is about the same as what 60 cars create.
Cambridge University Comes Up With a Tool Measuring Bitcoin’s Environmental Impact
The Cambridge Centre for Alternative Finance created an online tool meant to calculate how much energy cryptocurrencies consume per year. As per the calculations, bitcoin consumes around 121.36 terawatt-hours (TWh). The world’s most popular cryptocurrency will continue consuming at least the same amount of energy in the future unless its price drops drastically.
The researchers who worked on the online tool development, suggest that other cryptos have only slightly less impactful effects on the environment.
Still, the impact is not as large as with other things, including some devices used on an everyday basis. For instance, the amount of energy that always-on home devices waste only in the United States is higher than what Bitcoin and other cryptos consume.
China Rules the Bitcoin Mining World
Bitcoin’s bad impact on the environment probably isn’t going to go away anytime soon. One of the reasons for the pessimistic prediction is that the center of the world’s bitcoin mining industry is China. In fact, its government is actively encouraging crypto mining, considering that the cost of electricity in this country is very low.
The reason why electricity costs are very low in China is that the country relies on coal power plants. In fact, almost 60% of Chinese electricity is generated from coal and unsustainable fossil fuels. Only a small percentage of the total electricity is generated through renewable sources.
The good news is that the same is not the case in many other countries around the world. Actually, solar-powered crypto mining farms are becoming increasingly popular in places like California. Over in Texas, a few wind-powered crypto farms have emerged over the last 12 months.
And in Canada, Neptune Digital Assets and Link Global Technologies have teamed up to create a 5-megawatt mining site in Alberta, with 1,500 ASIC mining machines. The farm would use the energy created by wind, the sun, and natural gas.