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In addition to the energy waste and CO2 emitted, the mining process itself requires constant replacement of hardware and produces a steady stream of waste from broken and exhausted computer parts. It is a pure speculative activity of people gambling on the random movements of prices and the only output is simply shuffling numbers around in a computer at insane cost. Unlike other economic activities, the bitcoin scheme produces absolutely nothing for all this waste.

WolframAlpha gives some scary comparisons to help you relate to how much energy this is (think nuclear weapons). The bitcoin network annually wastes 78 TWh (terrawatt hours) annually or the energy consumption of several *million* US households. A single bitcoin transaction alone consumes 621 KWh, or half a million times more energy consumption than a credit card payment. (7/)Īnd the scale of this waste has some scary numbers attached to it. (6/)īitcoin mining is essentially a fucked up version of Candy Crush where you solve puzzles for coins, except the coins go to buy darknet fentanyl, launder money for warlords and provide gambling for hedge fund managers. Globally this consumes *nation state* levels of energy to keep it all running.

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(5/)Īnd so people have set up entire warehouses of computer hardware dedicated to run 24/7 consuming power and performing the trial computations required by the protocol. I won't cover the details of the algorithm, suffice it to say the premise of bitcoin mining is to prove how much power you can waste, and the more power you can waste, the more tokens you can probabilistically secure in exchange for your energy waste. The underlying technology of bitcoin is based on the notion of 'mining', a technical term for a process that keeps the network running and processing transactions. That alone is sufficiently awful on its own merits, but on top of this the environmental damages of bitcoin are enough to make even Greta Thunberg weep at the pointless waste of it all. TLDR on bitcoin economics: It's a pyramid-shaped investment scheme backed by the collective delusion that value can created out of nothing by convincing greater fools to buy it after you do. Because despite all the push for sustainable and green investment in the tech sector, there's a giant smoldering Chernobyl sitting at the heart of Silicon Valley which a lot of investors would prefer you remain quiet about. Let's discuss the environmental cost of bitcoin. When asked if the Bitcoin bubble is about to burst, he answers, 'That's my guess.' Then pauses and adds, 'But I really couldn't tell you when.' Ken Rogoff, a professor of economics at Harvard and a former chief economist at the IMF, tells the BBC that Bitcoin exists almost solely as a vehicle for speculation, rather than as a stable store of value that can be easily exchanged. 'We'd have to double our global energy production,' he says with a laugh. 'If Bitcoin were to be adopted as a global reserve currency,' he speculates, 'the Bitcoin price will probably be in the millions, and those miners will have more money than the entire Federal budget to spend on electricity.' The vast effort it requires also makes Bitcoin inherently difficult to scale, he argues.

Right now we're using a whole lot of energy to produce those calculations, but also the majority of that is sourced from fossil energy.' 'They're computations that serve no other purpose,' says de Vries, 'they're just immediately discarded again. All the millions of trillions of calculations it takes to keep the system running aren't really doing any useful work. And this vast computational effort is the cryptocurrency's Achilles heel, says Alex de Vries, the founder of the Digiconomist website and an expert on Bitcoin. They are currently reckoned to be making 160 quintillion calculations every second - that's 160,000,000,000,000,000,000, in case you were wondering. We can track how much effort miners are making to create the currency. The CCAF team surveys the people who manage the Bitcoin network around the world on their energy use and found that about two-thirds of it is from fossil fuels. And the electricity the Bitcoin miners use overwhelmingly comes from polluting sources.

The UK's electricity consumption is a little over 300 TWh a year, while Argentina uses around the same amount of power as the CCAF's best guess for Bitcoin. The University of Cambridge Centre for Alternative Finance has calculated that Bitcoin's total energy consumption is somewhere between 40 and 445 terawatt hours (TWh) a year, with a central estimate of about 130 terawatt hours, reports the BBC:

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