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In case you’re wondering when the environmental concerns surrounding Bitcoin started; this discussion already started weeks after BTC launched. Today marks 16 years of inaction by the Bitcoin community in addressing this massive problem.
Since everyone has mostly moved on to AI, you’d almost forget that Bitcoin continues to be responsible for significant energy consumption. The BTC network consumes ~170 TWh of electricity per year. That’s half(+) of all other data centers combined.
Given the network’s continued reliance on fossil fuels, the related carbon footprint exceeds 90 million metric tons of CO2 emissions. That’s more than global electric vehicles have contributed in reducing CO2 emissions.
Perhaps even more shocking is that it also exceeds the carbon footprint of the entire traditional financial industry, while BTC has a negligible presence among global cashless transactions. Among more than a trillion digital payments, Bitcoin handles less than 200 million.
As a result, if you’re in London and want to send money to New York, environmentally you’d be better off taking the plane to deliver a bag of cash than sending a BTC TXN. 1 BTC TXN on avg consumes as much power as a US household over 1.5 months
It just gets even worse if you consider e-waste generation & water consumption as well, since on average one iPhone’s weight worth of e-waste is generated on every single BTC TXN while a full backyard swimming pool worth of water goes up in smoke as well
It’s not like there is no solution at all for this. It’s already been demonstrated that there’s a relatively simple fix to mitigate almost all of the environmental impact. https://doi.org/10.1016/j.patter.2022.100633 Bitcoin does not have to waste resource, the BTC community just prefers it this way.
If you’re investing in cryptocurrencies in the EU, you’ll soon be confronted with these environmental costs on a regular basis, as the new MiCA regulation for crypto-asset service providers now includes mandatory disclosure on several key indicators discussed above.
For live data on sustainability metrics for the Bitcoin network make sure to check out https://digiconomist.net/bitcoin-energy-consumption
Also make sure to subscribe to the newsletter keep track of how AI is catching up with Bitcoin’s energy consumption. See my past work on this: https://www.cell.com/joule/fulltext/S2542-4351(23)00365-3