Bitcoin poses major electronic-waste problem

The surging popularity of Bitcoin comes at a huge environmental cost. According to the latest analysis of its sustainability, the electronic currency uses as much energy as a medium-sized country, and could generate thousands of tons of electronic waste per year (Joule 2019, DOI: 10.1016/j.joule.2019.02.007). Users ‘mine’ new Bitcoins with customized computer chips that solve cryptography problems and record their ownership of this cryptocurrency in a shared database called a blockchain. As more Bitcoins enter circulation —there are currently about 17.5 million of them—it gets progressively harder to mine new coins, requiring more computing power and therefore more energy.

Alex de Vries, a blockchain specialist at accountancy firm PricewaterhouseCoopers in Amsterdam, has now calculated that Bitcoin mining in 2018 used 40–62 TWh of energy. That’s equivalent to the energy consumption of countries like Hungary or Switzerland, and translates to a carbon footprint of 19–30 million metric tons (t) of CO₂ emissions. Bitcoin already accounts for at least 20% of the energy consumption of the world’s data centers, de Vries says, and each Bitcoin transaction uses at least 491 kWh, dwarfing the 0.4 kWh or so required for a conventional electronic-banking transaction.

Almost half of the world’s Bitcoin-mining capacity is located in Sichuan Province, China, taking advantage of cheap local hydroelectric power. However, hydropower output is highly variable over the year, and de Vries says that the 24/7 mining operations inevitably draw on other energy sources, principally coal-fired power stations that contribute to climate change.

Besides consuming tremendous amounts of energy, Bitcoin is also a growing source of electronic waste. When the currency launched in 2009, users mined Bitcoins with everyday computers. But in 2013, miners switched to application-specific integrated circuits (ASICs) that can only perform mining algorithms. This triggered a computational arms race, where only the most powerful ASICs can win the competition for new Bitcoins. When newer versions of the circuits are released—once every 18 months or so—existing units are rendered obsolete. “They are hard-wired to mine, and if they can’t do that profitably they become garbage,” de Vries says.

The latest ASIC was released in Dec. 2018. De Vries estimates that replacing existing ASICs with the new version will generate at least 11,000 t of electronic waste—not far off the annual amount of e-waste produced by Luxemburg—and represents about 135 grams of e-waste per Bitcoin transaction. De Vries has been tracking Bitcoin’s energy use over the past few years, but he says this is the first time that anyone has calculated the amount of e-waste it creates. “I was quite shocked,” de Vries says. “It’s going from bad to worse.”

“It’s enormous, no question,” agrees Ruediger Kuehr, Director of the Sustainable Cycles Programme at United Nations University, who was not involved in the study. “But it’s nothing in comparison to the global magnitude of e-waste.” Kuehr says that the world creates roughly 50 million t of e-waste every year and recycles less than 20% of it, with the remainder typically incinerated or consigned to landfill.

Bitcoin miners could reduce the currency’s environmental footprint in a stroke by moving from their current mining systems to an alternative mechanism called ‘proof of stake’, a more energy-efficient approach already used by other cryptocurrencies including Dash and NXT.

But de Vries warns that the community of Bitcoin miners would have to agree to the change, and they tend to be quite resistant to such moves. Meanwhile, the Bitcoin system was designed to withstand any government interference, he adds: “In the end, it’s very hard to stop it.”