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Researchers at the Technical University of Munich are encouraging regulators to look beyond Bitcoin when it comes to considering the environmental impact of cryptocurrency mining.
According to an August 4 issue of the scientific journal Joule, researchers Ulrich Gallersdörfer, Lena Klaaßen and Christian Stoll determined that Bitcoin (BTC) mining accounted for only 66% of the total energy consumption of the 20 largest cryptocurrencies by market capitalization.
“Based on the underlying algorithms, current hash rates and suitable mining devices, we conclude that Bitcoin accounts for 2/3 of total energy consumption, and poorly studied cryptocurrencies account for the remaining 1/3,” the report states:
“Thus, poorly studied currencies add nearly 50% to Bitcoin’s energy hunger, which alone can cause significant environmental damage.”
The study determined the energy consumption of altcoins by analyzing their hash rates and mining equipment. Blockchains included Ethereum (ETH), Bitcoin Cash (BCH), Bitcoin SV (BSV), Litecoin (LTC), Monero (XMR), Dash (DASH), Ethereum Classic (ETC), Zcash (ZEC), DogeCoin (DOGE) , Bitcoin Gold (BTG), Decred (DCR), RavenCoin (RVN), MonaCoin (MONA), Bytom (BTM), SiaCoin (SC), DigiByte (DGB), Horizen (ZEN), Komodo (KMD) and Bytecoin (BCN ).
Is cryptocurrency mining destroying the planet?
The research team pointed out that while the energy requirements of cryptocurrency mining are of concern to environmentalists, many studies focus solely on Bitcoin rather than all cryptocurrencies.
“Energy consumption, by itself, is not a problem in the context of climate change,” the report said. However, he said that crypto mining creates an unexpected load that requires additional resources. “Increasing the full load hours of some generation resources can lead to fuel switching effects and alter local emissions intensities,” thereby worsening environmental effects.
Bitcoin pioneer Hal Finney noticed as early as 2009, mining had the potential to create an environmental nightmare due to its energy needs, and this was before the creation of altcoins. According to the Digiconomist, the collective energy consumption of the Bitcoin mining network to date – around 63.5 terawatt hours – outshines the energy consumption of several developed countries, including Switzerland.
Is oil the answer?
Most of the power for Bitcoin mining already comes from renewable energy sources. According to a December 2019 report from research firm CoinShares, around 73% of BTC mining is powered by renewable energy.
One proposed solution to address the energy consumption of mining cryptocurrencies is to convert the excess gas produced during oil extraction into electricity. By organizing containerized mining operations in the fields, there is no need to install pipelines or waste excess gas. The operations simply turn excess gas or oil into electricity to power the mining platforms.
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