Bitcoin, ethereum, dogecoinand other popular cryptos reached record highs in 2021, as did crypto-reliantNFTs, raising concerns about the increasing amount of energy needed to mine the coins. As the crypto markets crashed in 2022, crypto mining continued to consumeroughly as much power as Argentina and to have a carbon footprint equivalent to that of Greece, according to a research report titled "Revisiting bitcoin's carbon footprint," published in February. As the energy bill for crypto mining rises, so does the amount of carbon and waste, adding to the growing climate crisis.
Here's what you need to know about crypto mining and its energy uses.
What is crypto mining?
When bitcoins are traded, computers across the globe race to complete a computation that creates a 64-digit hexadecimal number, or hash, for that bitcoin. This hash goes into a public ledger so anyone can confirm that the transaction for that particular bitcoin happened. The computer that solves the computation first gets a reward of 6.2 bitcoins, or about $134,000 at current prices.
Other cryptocurrencies and NFTs use similar mining technologies, contributing to the overall energy usage.
What is a crypto mining rig?
It's a barebones computer with multiple graphics cards, or GPUs, instead of the single-card standard, and it does the work to complete a computation. Rigs usually use powerful GPUs from Nvidia and AMD to handle calculations and require high-wattage power supplies. The popularity of mining led to a shortage of graphics cards, which in turn caused their values to rise.
Why is crypto mining so energy-intensive?
For starters, graphics cards on mining rigs work 24 hours a day. That takes up a lot more power than browsing the internet. A rig with three GPUs can consume 1,000 watts of power or more when it's running, the equivalent of having a medium-size window AC unit turned on.
Not only do rigs take up power, they also generate heat. The more rigs you have, the hotter it gets. If you don't want your rigs to melt, you need some cooling. Many mining rigs have multiple built-in computer fans. But if you have multiple rigs, the room quickly gets hot, requiring external cooling. Small operations, like those run by individuals, can get by with a typical standing fan. Mining centers, however, need a lot more cooling, which in turn requires even more electricity.
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How much energy does mining take?
The Digiconomist's Bitcoin Energy Consumption Index estimated that one bitcoin transaction takes 1,449 kWh to complete, or the equivalent of approximately 50 days of power for the average US household.
Bitcoin mining usesaround as much energy as Argentina, according to the Bitcoin Energy Consumption Index, and at that annualized level of 131.26 terawatt-hours, crypto mining would be in the top 30 of countries based on energy consumption.
Energy consumption for bitcoin mining was at its highest at the end of 2021 and the early months of 2022, consuming more than 200 terawatt-hours.
Why is using so much energy bad for the environment?
Fossil fuels account for more than 60% of the energy sources in the US. A majority of that percentage is natural gas and a minority is coal. The carbon dioxide produced by fossil fuels is released into the atmosphere, where it absorbs heat from the sun and causes the greenhouse effect.
As mining rigs consume more energy, nearby power plants must produce more electricity to compensate, which raises the likelihood that more fossil fuels will be used. States that have struggling coal power plants, such as Montana, New York and Kentucky, are trying to cash in by wooing crypto mining companies.
There's also the issue of electronic waste. This can include broken computers, wires and other equipment no longer needed by the mining facility. Bitcoin mining's electronic waste is 34 kilotons, or comparable to the amount produced by the Netherlands.
What's being done about this energy problem?
Not much. The 3rd Global Cryptoasset Benchmarking Study from the University of Cambridge found that 70% of miners based their decision on what coin to mineon the daily reward amount. Energy consumption made up only 30% of their choice.
Access to renewable energy at a low price, however, attracts crypto miners. China's Sichuan Province has the country's second-largest number of miners due to its abundance of cheap hydroelectric power. Its rainy season helps to generate so much energy that cities are looking for blockchain firms to relocate in order to avoid wasting power. Due to worries about energy shortages, China cracked down on bitcoin mining facilities in late 2021, but the farms went underground and rebounded.
The operators of ethereum, the second most popular and energy-consuming blockchain behind bitcoin, are doing something to change the amount of energy its miners consume. Ethereum 2.0 is an upgrade being testednow. Instead of computers trying to solve computations -- referred to as proof-of-workprotocol -- computers will be randomly selected to create blocks for the blockchain, while computers that weren't selected will validate those blocks created.
To ensure miners do their job, each miner has to stake 32 ether coins, which is equivalent to $47,000, hence the term for this protocol: proof of stake. This change should reduce the amount of energy needed for ethereum mining by 99.95%. Ethereum is set to transition to the new protocol on Sept. 19, but that date is not final.
What other cryptos are more energy-efficient than bitcoin?
A growing number of coins -- there are more than 19,000 of them -- use the proof-of-stake protocol that ethereum 2.0 will transition to, resulting in a drop in power consumption.
Cardano, for example, uses its own proof-of-stake protocol and consumed6 gigawatt-hours in 2021. Chia is another coin with a low-energy approach called the proof-of-space protocol. Instead of requiring intensive computation, Chia requires farmers to allocate space on a computer's hard drive, called "plots," that will be called upon by the blockchain based on certain factors.
How much energy does mining take? The Digiconomist's Bitcoin Energy Consumption Index estimated that one bitcoin transaction takes 1,449 kWh to complete, or the equivalent of approximately 50 days of power for the average US household.
But crypto has a dirty little secret that is very relevant to the real world: it uses a lot of energy. How much energy? Bitcoin, the world's largest cryptocurrency, currently consumes an estimated 150 terawatt-hours of electricity annually — more than the entire country of Argentina, population 45 million.
Why does crypto consume so much electricity? Bitcoin relies on a large decentralized network of computers (and thus, computing power) to verify and record every transaction made with cryptocurrency.
Bitcoin mining consumes roughly 0.5% of all energy consumption worldwide, according to the New York Times. That's roughly seven times more than Google's total energy consumption per year, the report said.
Research has shown that a surge in cryptomining is also significantly raising energy costs for local residents and small businesses, and has added to the strain on the power grid in states like Texas, the letter noted.
The risks of mining are often financial and regulatory. As aforementioned, Bitcoin mining, and mining in general, is a financial risk because one could go through all the effort of purchasing hundreds or thousands of dollars worth of mining equipment only to have no return on their investment.
“Put differently, Bitcoin mining, in some instances, creates climate damages in excess of a coin's value. This is extremely troubling from a sustainability perspective.” Carbon emissions for mining a single bitcoin rose from 0.9 tons in 2016 to 113 tons in 2021—a 126-fold increase.
According to reports, one Bitcoin transaction takes 1,544 kWh of energy, which is equivalent to the power that can keep an average US household running for 53 days. With the high energy consumption, the virtual currency's mining produces a large amount of e-waste (electronic waste).
Bitcoin miners usually pay for the energy they use directly. They provide a critical service to the network, verifying and validating Bitcoin transactions and minting new tokens for circulation. The network then, reimburses them through block rewards.
It takes around 10 minutes to mine just one Bitcoin, though this is with ideal hardware and software, which isn't always affordable and only a few users can boast the luxury of. More commonly and reasonably, most users can mine a Bitcoin in 30 days.
The short answer is - very very small amount of internet bandwidth. Around 5mbps would work for even medium to large mining farm. Red Panda Mining made a great video testing himself how much bandwidth a standard 6 x RX 580 Mining Rig consumes in one hour.
With 5–10 ASIC miners, you can mine 0.01 BTC per day. But to get one BTC, it would take about 100 days of mining. Therefore, mining bitcoins at home is not very profitable.
The main reason for high bitcoin miner fees is supply and demand. The bitcoin block size is 1MB, which means that miners can only confirm 1MB worth of transactions for each block (one every ten minutes).
Typically, prices range from $80-$140 per kW per month. This includes the space, power, internet, cooling and security. You will want to get your cost per kW per month. Next, you will want to calculate your total power demand.
The profitability of cryptocurrency mining depends on your setup. A powerful GPU or ASIC system can make it more lucrative. If you have cheap or free electricity, crypto mining can still be profitable.
Top-down estimates of the electricity consumption of cryptocurrency mining in the United States imply that the industry was responsible for an excess 27.4 million tons of carbon dioxide (CO2) between mid-2021 and 2022 — or three times as much as emitted by the largest coal plant in the U.S. in 2021.
Because of the expense of cryptocurrency mining there is simply too much risk. You could invest your time and money into mining and still end up with nothing. Even if you are lucky enough to successfully mine cryptocurrency the price could drop. A deflated value would then leave you with a large investment in nothing.
Across the world, mining contributes to erosion, sinkholes, deforestation, loss of biodiversity, significant use of water resources, dammed rivers and ponded waters, wastewater disposal issues, acid mine drainage and contamination of soil, ground and surface water, all of which can lead to health issues in local ...
Mine exploration, construction, operation, and maintenance may result in land-use change, and may have associated negative impacts on environments, including deforestation, erosion, contamination and alteration of soil profiles, contamination of local streams and wetlands, and an increase in noise level, dust and ...
In total, the global climate damages of bitcoin between 2016 and 2021 are estimated at $12 billion, the researchers said, and the carbon emissions have increased 126 fold over that time.
Each one of these machines requires energy to run, plus more energy for cooling. Globally, Bitcoin mining consumes more energy each year than the entire country of Argentina. In the US alone, Bitcoin mining produces an estimated 40 billion pounds of carbon emissions each year.
In May of 2022, the world's sum total of Bitcoin mining operations had an annual energy budget nearly equal to the entire country of Argentina, or the Czech Republic, or, according to Cambridge University's Bitcoin Electricity Consumption Index, all the tea kettles in England boiling water for 26 years.
Bitcoin mining is legal in most countries, but several jurisdictions have banned this practice. China, one of the world's largest economies, has outlawed bitcoin mining. The nation's government has also prohibited all cryptocurrency transactions.
Bitcoin can also be taken by the government through a process called forfeiture. Forfeiture is the permanent loss of that bitcoin by way of court order or judgment. Seizure may occur before forfeiture and not all seizures will result in forfeiture.
Crypto mobile mining can be performed on iOS and Android systems via solo or pool mining services. Cryptocurrencies like Bitcoin (BTC) are created using a distributed computing process called mining.
While mining bitcoin on an individual computer is no longer viable, there are other cryptocurrencies that you can still mine at home if you're prepared to put in the effort. Updated 12th October 2022.
Based on this data it is estimated that the global bitcoin mining industry's sustainable electricity mix is now 59.5% or had increased approximately 6% year-on-year, from Q2 2021 to Q2 2022, making it one of the most sustainable industries globally.
Now, a report has tried to quantify just how harmful Bitcoin mining is to the environment. According to a study by StockApps.com, Bitcoin mining generates 30.7 kilotons of e-waste annually.
It takes an estimated 1,449 kilowatt hours (kWh) of energy to mine a single bitcoin. That's the same amount of energy an average U.S. household consumes in approximately 13 years.
Contrary to popular belief, large portions of the Bitcoin network's hash rate rely on renewable energy sources. Miners are attracted to sources with extremely low levelized costs of energy, which often are solar, wind, hydroelectric and geothermal power.
Technically, it is not possible to mine 1 Bitcoin, especially if you are a solo miner. However, if you mine within a pool, your rewards will typically be in satoshis, which are denominations of the BTC coin that could equal 1 BTC over a period of mining.
The upfront mining equipment and electricity costs. The biggest drawback of bitcoin mining is the cost. There's no way around it — setting up a mining operation is expensive. In the early days of bitcoin, miners could use standard computers, but as more people joined the bitcoin network, mining difficulty increased.
Generally, ASIC miners are projected to last for about 3-5 years, although your machine can last more than this range if used and maintained well enough. It could also break down within a few months if not maintained properly or used in poor conditions.
Many people wonder how many Bitcoins can be mined by a person in a day. There are currently 6.25 bitcoins produced in each block, and a block is produced every 10 minutes. This means that there are 6.25 (Bitcoins per block) x 6 (blocks per hour) x 24 (hours per day) = 900 bitcoins produced each day.
As of the first-half 2022, approximately 900 bitcoins were mined each day globally. Every 10 minutes, miners verify one block of bitcoin transactions. The current reward for verifying one block of bitcoin is 6.25 bitcoins.
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