One week ago, Earth Day was celebrated across the globe. Earth Day serves as a day to reflect on our contributions to our planet, good and bad, and learn how we can treat it better. It is important that the crypto community is aware of the environmental impacts of the space. Not all members of the community are aware of the environmental impacts of cryptocurrency mining. Bitcoin mining has a massive carbon footprint. If Bitcoin were a country, its energy consumption would make it the 42nd most energy consuming nation.
According to the Bitcoin Energy Consumption Index, Bitcoin mining accounts for 0.28% of the world’s electricity consumption, which is roughly equivalent to the electricity consumption of the entire country of Switzerland. This number is growing steadily, with Bitcoin currently estimated to be annually consuming 63.3-Terawatt Hours (TWh). Exactly a year ago, Bitcoin’s energy consumption was estimated to be 11.16 TWh, and on January 1st, 2018 consumption was estimated to be 36.79 TWh.
While Bitcoin is the target for the majority of crypto-currency mining operations, it is important to consider that there are many other currencies being mined. The carbon footprints of those are not included in the estimates above.
A substantial investment is needed when creating a cryptocurrency mining operation, and electricity costs are also a recurring cost that significantly detracts from the operations ROI. However, a firm known as Hadouken Pty Ltd. has envisioned a way to avoid such costs, and have decided to create a 20 Megawatt (MW) solar farm to mine cryptocurrencies. The solar farm has recently received approval to be built and operate by the Joint Development Assessment Panel on Tuesday. The farm will be built in Collie, a town located in Western Australia, which is known for its large amount of solar resources.
Hopefully, other crypto-mining operations can seek environmentally friendly sources of energy like this new farm in Australia. Otherwise, Cryptocurrency mining will continue to increase its carbon footprint, eventually reaching dangerous levels, which will undoubtedly result in governmental backlash.