The amount of energy required to "extract" the value of a dollar of bitcoins is more than twice that required to extract the same value of copper, gold or platinum, according to a new document, suggesting that the virtual work that supports bitcoin, ethereum and similar projects are more similar to real ones than anyone else.
A bitcoin dollar requires about 17 megajoules of energy for mine, according to researchers at the Oak Ridge Institute in Cincinnati, Ohio, compared to four, five and seven megajoules for copper, gold and platinum.
The other cryptocurrencies are also not very good in comparison, the researchers write in the journal Nature Sustainability, giving a cost per dollar of 7MJ per ethereum and 14MJ for the monore of the cryptocurrency focused on privacy. But all the cryptocurrencies examined are fine compared to aluminum, which takes an astonishing 122MJ to extract the value of a dollar of ore.
"Mining" is the name of the process by which the blockchains, such as those that are subject to cryptocurrencies, are regulated and verified. In the case of bitcoins, for example, the currency is borne by the "miners" due to the absence of a centralized authority confirming the transactions. These miners effectively enter into a competition to waste most of the electricity possible by making unnecessary arithmetic calculations of times per second. A lucky contestant wins either a prize, equal to about eighty thousand dollars in bitcoins, and the right to verify all the transactions carried out in the last 10 minutes.
Prizes can be virtual, but the cost of energy is very real. Previous attempts to measure the amount of electricity consumed to power the bitcoin network, still the largest existing blockchain, have focused on aggregate network size analysis. In November 2017, an estimate put the energy consumption of the network as equivalent to that of the Irish nation. Another noted that it produced the same annual carbon emissions of one million transatlantic flights.
The new document is the first to examine mining efforts from the point of view of the cost of energy per dollar. "The comparison is made to quantify and contextualise the decentralized energy demand that requires the extraction of these cryptocurrencies", the authors write, "and encourage the debate about whether these energy demands are both sustainable and appropriate given the product that it derives from relatively similar energy consumption (when normalized by the market price). "
To take into account the wild fluctuations in cryptocurrency prices and hence the efforts of miners, the researchers used a median of all values between 1 January 2016 and 30 June 2018 and attempted to explain the geographic dispersion of the bitcoin miners. "Any cryptocurrency produced in China would generate four times the amount of CO2 compared to the amount generated in Canada," they write, emphasizing the importance of such country-dependent accounting.
In the long term, the environmental impact of cryptocurrencies will vary not only with their market value, but also with the adoption of new technologies. For example, the Ethereum project expressed interest in moving from the energy-intensive "test of work" to a relatively poorly tested alternative, "play test".