It seems like every week there is a more outlandish piece of hyperbole, regarding the energy used to mine bitcoin. “Each transaction could power 10 households for a week!; More energy than the whole of France, Russia and Vatican City, combined;! Enough energy to turn the sand of all the world’s beaches into glass, build a gigantic glass rocket ship out of it, and blast it to Alpha Centauri.”
Scientists from the U.S. Department of Energy’s Oak Ridge Institute for Science and Education conducted a study to evaluate how much energy is consumed by mining cryptocurrencies in comparison to aluminium, copper, gold, platinum and rare earth oxides.
The scientists reviewed the period from Jan.1, 2016, to June 30, 2018, and found that the mining of Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) and Monero (XMR) consumed an average of 17, 7, 7 and 14 megajoules (MJ) to generate one U.S. dollar, respectively.
In comparison, mining aluminium, copper, gold, platinum and rare earth oxides consumed 122, 4, 5, 7 and 9 MJ to generate the same value. These findings indicate that mineral mining, with the exception of aluminium and some oxides, draws less energy than crypto.
While these claims range from ‘patently untrue’ to ‘taken wildly out of context‘, nobody questions the benefits of greater efficiency. Solutions so far include recycling heat generated by rigs, using cool locations with excess power, or a combination of both. What’s more, a recent study found that nearly 80 percent of all bitcoin mining operations using renewable energy.
Alternative Energy Sources
A Dutch organisation called the Institute of Human Obsolescence (IoHO), turned their attention to the power of beasts. And because some people get a bit antsy about exploiting animals, they hooked a bunch of humans up to thermoelectric generators.
Since 2015, 37 people have volunteered, racking up a total of 212 hours mining time. Sadly this produced only 127.2 watts of power or an average of 0.6 watts/hour per person. So how many people would we need to mine, say a bitcoin per month?
According to the Digiconomist Bitcoin Energy Consumption Index, created by PricewaterhouseCoopers data consultant and blockchain specialist Alex de Vries, bitcoin energy consumption fell around 27 percent in the last two weeks of November.
The cryptocurrency still uses more energy than Bangladesh, though. Scott Clavenna, chairman of Greentech Media at Wood Mackenzie Power & Renewables, said bitcoin’s high energy consumption was not only a sustainability problem but also an issue for those dreaming of a truly decentralized currency.
“Mining has been a classic double-edged sword,” he said. “As a rewards-based approach to securing a network, it has proven successful in supporting the growth of bitcoin and other cryptocurrencies, but it also has led to a couple of unfortunate outcomes.”
As the price of bitcoin goes up, so does the incentive to invest more in energy-hungry mining equipment, he said.
Consequently, the mining ecosystem has consolidated around players who can afford massive mining operations or who band together into large mining pools.
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.
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).”