Bitcoins might be attractive for their astonishing spike in value, but with each peak in growth, electricity consumption follows. Indeed, the more people mine bitcoins, the more energy is needed to solve cryptographic puzzles.
It is estimated that for each Bitcoin transaction, 215 kilowatt-hours (KWh) of power are used, which is equal to an average American household’s weekly energy consumption. But Bitcoin’s ecological footprint is not only linked to power usage. Another issue is its carbon emissions. These are directly linked to, for example, Mongolia’s coal-powered Bitcoin mine which consumes up to 24,000-40,000 kg of CO2 per hour – equal to what a car would consume during a round-trip road trip from Paris to Vladivostok!
The core of the problem is linked to Bitcoin’s decentralized network, as each bitcoin miner must be equipped with all the necessary tools to carry-out the mining. Since it is individuals that do the mining, their tools don’t necessarily abide to the more stringent energy efficiency guidelines.
At a time when central banks are being scrutinized and asked to be more energy efficient in terms of currency production, the moment has also come to take a better look at the impact cryptocurrencies have on the environment because, as virtual as they may be, their impact on the planet remains very real.