The amount of energy required to “mine” one dollar’s worth of bitcoin is more than twice that required to mine the same value of copper, gold or platinum, according to a new paper, suggesting that the virtual work that underpins bitcoin, ethereum and similar projects is more similar to real mining than anyone intended.
One dollar’s worth of bitcoin takes about 17 megajoules of energy to mine, according to researchers from the Oak Ridge Institute in Cincinnati, Ohio, compared with four, five and seven megajoules for copper, gold and platinum.
Other cryptocurrencies also fair poorly in comparison, the researchers write in the journal Nature Sustainability, ascribing a cost-per-dollar of 7MJ for ethereum and 14MJ for the privacy focused cryptocurrency monero. But all the cryptocurrencies examined come off well compared with aluminium, which takes an astonishing 122MJ to mine one dollar’s worth of ore.
“Mining” is the name for the process by which blockchains, such as those that underpin cryptocurrencies, are regulated and verified. In bitcoin’s case, for instance, the currency is backed by “miners” due to the absence of a centralised authority confirming transactions. These miners effectively enter a competition to waste the most electricity possible by doing pointless arithmetic quintillions of times a second. One lucky competitor wins both a reward, worth about eighty thousand dollars in bitcoin, and the right to verify all transactions made in the last 10 minutes.
The rewards may be virtual, but the energy cost is very real. Previous attempts to gauge how much electricity is burned to power the bitcoin network, still the largest blockchain in existence, have focused on looking at the size of the network in aggregate. In November 2017, one estimate placed the power consumption of the network as equivalent to that of the nation of Ireland. Another noted it was producing the same annual carbon emissions as one million transatlantic flights.
The new paper is the first to look at the mining efforts from the point of view of energy cost per dollar benefit. “The comparison is made to quantify and contextualise the decentralised energy demand that the mining of these cryptocurrencies requires,” the authors write, “and to encourage debate on whether these energy demands are both sustainable and appropriate given the product that results from relatively similar energy consumption (when normalised by market price).”
To account for the wild fluctuations in cryptocurrency price, and therefore effort expended by miners, the researchers used a median of all the values between 1 January 2016 and 30 June 2018, and attempted to account for the geographic dispersal of bitcoin miners. “Any cryptocurrency mined in China would generate four times the amount of CO2 compared to the amount generated in Canada,” they write, highlighting the importance of such country-dependent accounting.
In the long term, the environmental impact of cryptocurrencies will vary not only with their market value, but also according to the adoption of new technologies. The Ethereum project, for instance, has expressed an interest in moving from the energy intensive “proof of work” to a relatively untested alternative, “proof of stake”.