Photo: A considerable amount of computing power is required to generate the virtual currency. (ABC News)
Las Vegas and the virtual currency bitcoin have many things in common: They’re relatively new compared to their peers, they run on vast amounts of computing power, and people around the world look to these places to amass vast fortunes.
- Bitcoin is a digital cryptocurrency independent of any sovereign government
- Vast amounts of computing power is needed to generate one bitcoin
- Much of the energy used by bitcoin users stems from fossil fuel sources
Now, another similarity can be added to the list, as researchers have found that sin city and bitcoin share the same annual carbon footprint owing to their reliance on fossil fuel-generated power.
A study by researchers at the Technical University of Munich and the Massachusetts Institute of Technology examined how much power is consumed by computers used to generate bitcoins and process transactions.
Writing in the journal Joule, researchers said they then combined the results with the carbon emissions from electricity production in the countries where the computers were located.
They concluded that, in late 2018, the entire bitcoin network was responsible for 22–22.9 million tonnes of CO2 per year — similar to a large Western city or an entire developing country like Sri Lanka.
Total global emissions of the greenhouse gas from the burning of fossil fuels were about 37 billion tonnes last year.
“There are bigger factors contributing to climate change,” said Christian Stoll, one of the study’s authors.
“However, the carbon footprint is big enough to make it worth discussing the possibility of regulating cryptocurrency mining in regions where power generation is especially carbon-intensive.”
Others say numbers are conservative estimates
Photo: Individual users must ‘mine’ bitcoin online in order to possess the currency. (Reuters: Stephen Lam)
The researchers said about 68 per cent of the computing power used to generate, or mine, bitcoins is in Asia, 17 per cent is in Europe and 15 per cent is in North America.
Alex de Vries, a bitcoin researcher who wasn’t involved in the study, questioned whether the method used to determine the location of computers was reliable enough.
But Mr de Vries said the emission figures were consistent with those he had calculated using a different method, and could possibly even be on the low end.
“The folks in this study were very conservative on the energy side,” he said.
The environmental impact of bitcoin, the most well-known virtual currency, has long been a concern, especially given its limited uptake.
Last year the bitcoin network processed about 81 million transactions, compared to 500 billion transactions handled by the regular global banking system, said Mr de Vries.
“If you look at the carbon footprint per transaction, that’s where the real shock is,” said Mr de Vries, estimating it at about 271 kilograms of CO2 per transaction — or several hundred times that of a standard credit card payment.