New Delhi: Bitcoin miners are spending more than 75 per cent of their earnings in soaring electricity costs, resulting in a significant carbon footprint which is damaging to our environment, a new report revealed on Tuesday.
Bitcoin (BTC) mining is a very electricity-intensive process. A recent study has shown that a single Bitcoin transaction consumes about 2165 kWh of electricity which a regular household in the US would use in 74 days.
“Factor in the roughly $0.14/kWh that an average household pays, and the magnitude of expenditure becomes evident,” according to the report from CryptoMonday.de.
“Bitcoin mining is central to the sustenance of the BTC ecosystem as besides enabling verification of transactions, it helps secure the network. The activity is so critical that the BTC network incentivizes miners in the crypto through the miners’ reward,” said Elizabeth Kerr, a financial content specialist.
One of BTC’s core features, its proof-of-work (PoW) consensus mechanism, is also every miner’s headache.
PoW requires them to solve complex equations for a share of newly-mined coins.
“The equations require the use of specialized mining equipment with high computational power. The equipment consumes tons of kilowatt-hours (kWhs), ballooning the miners’ electricity bills,” Kerr informed.
PoW has also come under criticism for its environmental footprint and critics hold that it is a wasteful and unsustainable crypto for the universe.
Studies have shown its carbon emissions to match those of entire nations.
One of the studies estimates that Bitcoin emits nearly 114 megatonnes of CO2 annually, a value comparable to Czech Republic’s.
“Bitcoin is hardly mainstream, but it’s already registering a significant carbon footprint. That reality is what’s worrying its opponents. They claim that the broader adoption of the coin would significantly impact the global environment negatively,” Kerr noted.
Despite strong opposition from some quarters, BTC enthusiasts still believe in the crypto’s value. They hold that notwithstanding the environmental concerns its usage raises, humanity has a lot to benefit from its wider adoption.
“Moreover, some miners have made the switch to fully renewable energy sources. Others are in different stages of that transition. Transiting to greener and affordable alternatives should help allay environmentalists’ fears,” the report said.