An interdisciplinary team of researchers at the Technical University of Munich (TUM) has revealed that the use of Bitcoin causes around 22 megatons in CO2 emissions a year. That amount is comparable to the total emissions of cities such as Hamburg or Las Vegas.
Quadrupled in 2018
Although Bitcoin is a virtual currency, the energy consumption associated with its use is very real. Bitcoin mining is a very energy-intensive and the process has increased rapidly in recent years, having quadrupled in 2018 alone.
Many studies have tried to calculate the level of emissions caused by Bitcoin mining. "These studies are based on a number of approximations, however," said Christian Stoll, who conducts research at the Technical University of Munich (TUM) and the Massachusetts Institute of Technology (MIT).
To avoid this, a team of management sciences and informatics researchers at TUM took a detective-like approach to their calculation in order to get conclusive data.
They started their process with the power consumption of the network. "Today special systems are used, known as ASIC-based miners," explained Stoll.
In 2018 the three manufacturers who control the ASIC miner market planned IPOs. Using the mandatory IPO filings, the team calculated the market shares of the companies' respective products.
Bitcoin annual electricity consumption
The researchers then calculated the annual electricity consumption by Bitcoin, as of November 2018, to be about 46 TWh. The followup question was how much CO2 did this consumption generate. The answer to that question lay in the locations of the miners.
The team used live tracking data from the mining pools to get their estimates. "In these groups, miners combine their computing power in order to get a quicker turn in the reward for solving puzzles -- similar to people in lottery pools," explained Stoll.
Using the IP addresses, the team was able to localize 68 percent of the Bitcoin network computing power in Asian countries, 17 percent in European countries, and 15 percent in North America. In the end, the total carbon footprint of the Bitcoin system was between 22 and 22.9 megatons per year.
"Naturally there are bigger factors contributing to climate change. 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," said Christian Stoll.
"To improve the ecological balance, one possibility might be to link more mining farms to additional renewable generating capacity."