Beyond the enormous amount of energy used in the bitcoin mining process, the cryptocurrency has another major problem – generating tons of electronic waste. The per year e-waste, as of Tuesday, stood at 22.59 metric kilotons (2.25 crore kilogram) comparable to the small IT equipment waste of the Netherlands, showed Digiconomist’s Bitcoin Electronic Waste Monitor. “The reason for this is that Bitcoin mining is done with specialized (singular purpose) hardware, which becomes obsolete roughly every 1.5 years,” it said. The e-waste recorded an all-time high of 30.39 metric kiloton (3.07 crore kilogram) on May 9, this year before it slipped to 14.99 metric kiloton on June 29 – the lowest since June 2019 levels, data showed.
In fact, bitcoin generates 242.50 grams of average e-waste per transaction processed on the blockchain. That’s equivalent to the weight of 1.48 iPhones 12 or 0.49 iPads. Explaining how bitcoin generates e-waste, Digiconomist said that within the bitcoin network, all of the participating mining machines are competing with each other for the reward of generating a new block for bitcoin’s underlying blockchain. The chance of creating a new block for the blockchain is proportional to one’s share of the total computational power.
“In such an environment, miners can only compete in terms of cost-efficiency. Mining machines require energy for the task of generating hashes. Therefore, the efficiency of this hardware is determined by the amount of electricity required to complete a certain amount of computations. The more computations per unit of energy, the more profitable a machine can be. This has caused a rat race to develop more efficient mining hardware,” it added.
In comparison to the 242.50 grams of average e-waste generated by 1 bitcoin transaction, 10,000 Visa transactions generate only 40 grams of e-waste. “The only way to make Bitcoin truly sustainable is to replace its mining mechanism. Alternatives to this (e.g. Proof-of-Stake) are already available and used by an array of alternative cryptocurrencies,” the monitor said.
According to a recent research report by Bloomberg, the total power consumed by the bitcoin network has already crossed the 2020 consumption level of around 67 terawatt-hours (TWh) and by the end of 2021, the mining is expected to consumed 91TWh of energy — as much as Pakistan. As per the Cambridge Bitcoin Electricity Consumption Index by the University of Cambridge, bitcoin’s power consumption is closely linked to the financial costs incurred in mining as well as bitcoin’s expected price trajectory.
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