The amount of energy required to mine bitcoin, or digital gold as some proponents like to call it, is considerably higher than that of physical gold, a research study has found.
In a research paper for The Nature International Journal of Science, Max Krause, a research engineer at the Oak Ridge Institute for Science and Education, and Thabet Tolaymat of the Environmental Protection Agency found that the cost to mine $1 worth of bitcoin
is more than three times the cost to mine $1 of gold and other precious metals.
Between Jan. 1, 2016, and June 30, 2018, they found that it costs an average 17 megajoules to mine $1 worth of bitcoin and between seven and fourteen other popular cryptocurrencies, including Ether,
“Comparatively, conventional mining of aluminium, copper, gold, platinum and rare earth oxides consumed 122, 4, 5, 7 and 9 [megajoules] to generate one U.S. dollar, respectively, indicating that (with the exception of aluminium) crypto-mining consumed more energy than mineral mining to produce an equivalent market value,” the wrote.
Furthermore, the researchers said the estimates are at the lower end of the spectrum, noting the study did not include energy costs for cooling equipment used in crypto-mining as well as maintenance and infrastructure costs.
The surge in mining costs is a result of rising hash rates, which is a measure of a miners performance. A higher hash rate increases the chance a computer has of solving the mathematical puzzle required to earn cryptocurrency, but in doing so, the amount of energy required also goes up.
The debate over the effects of bitcoin mining on the environment is nothing new. In fact, a recent study by the University of Hawaii concluded that the electricity demands of bitcoin mining could produce enough CO2 emissions to single-handedly raise global temperatures by 2ºC by 2023. In addition, according to the Bitcoin Energy Consumption Index, bitcoin mining uses about as much energy as the entire country of Austria.
However, as the arms race to mine bitcoin shows no sign of ending, the researchers said the energy consumption will only continue to rise. “While the market prices of the coins are quite volatile, the network hash rates for three of the four cryptocurrencies have trended consistently upward, suggesting that energy requirements will continue to increase,” they said.
The pair added that the data should be assessed at a country-specific level, noting that any cryptocurrency mined in China generates four times the amount of CO2 compared to one in Canada.
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