Military Review

How Bitcoin affects the ecology of the Earth


In just a couple of years, cryptocurrencies have finally turned from something unusual into a completely ordinary thing, which is recognized by economists, IT specialists, and has become more understandable for ordinary citizens. At the same time, Bitcoin remains the most famous cryptocurrency.

Bitcoin, like other cryptocurrencies, does not appear out of thin air. This digital currency is directly powered by electricity and enormous computing power. No other branch of modern life requires as much new and very expensive computer hardware as mining bitcoin and other cryptocurrencies.

It is not surprising that today the environmental impact of cryptocurrency mining is increasingly being discussed. There is debate over whether the process of mining cryptocurrencies really has an impact on the carbon footprint. In a world in which many countries are actively fighting to reduce carbon dioxide emissions into the atmosphere, working on the development of renewable, so-called green energy, this issue is really on the agenda.

Cryptocurrency mining requires more electricity than many countries consume

The most expensive and well-known to date cryptocurrency "bitcoin" consumes more electricity to ensure its performance than many countries. The corresponding calculations have been made by experts at the University of Cambridge for several years. So, already in 2019, bitcoin mining and ensuring the operability of this network exceeded the annual energy consumption of Switzerland in volume.

In 2021, scientists from the University of Cambridge presented new data.

During this time, the popularity, and most importantly, the price of bitcoin in the world has increased many times. Bitcoin mining required 2020 TWh (terawatt hours) of electricity to be generated in 123,99, according to British scientists representing one of the world's oldest universities. This is more than countries such as Argentina or the UAE consume per year (121 TWh and 113,2 TWh, respectively).

Small home crypto farm

For example: Russia consumes 965,2 TWh of electricity per year. And the global consumption of electricity by mankind is estimated at 20 TWh per year.

Compared to these numbers, the energy consumption to keep Bitcoin running doesn’t look so big anymore. Bitcoin currently accounts for approximately 0,57 percent of the total electricity consumed by humanity. True, it should be noted that we are talking about only one, albeit the most popular cryptocurrency. But there are dozens and hundreds of other cryptocurrencies, the mining of which also consumes certain resources.

In any case, even now, the energy consumption for the production and maintenance of the ecosystem of one bitcoin is ahead of the consumption of electricity in a large number of countries of the world that are not the smallest in terms of population and size.

For clarity, experts from Cambridge gave examples from everyday life. Thus, the annual consumption of electricity only by bitcoin could ensure the operation of electric kettles throughout Europe, together with the UK, for 4,1 years. And the University of Cambridge's electricity needs would be met 704 years ahead.

How Elon Musk first accepted bitcoin and then abandoned it

In March 2021, there was a lot for the growth and rate of bitcoin, and the American billionaire Elon Musk made interest in it. A businessman and engineer popular in the world and in Russia, who is actively developing his private space company SpaceX, has publicly supported cryptocurrencies, including on his social networks.

Bitcoin was greatly influenced by the decision of Elon Musk and his company Tesla, which produces electric vehicles, to accept payments for cars in cryptocurrency. Tesla authorized the sale of its own electric cars for bitcoins on March 24, 2021. This payment method was only available to US citizens. At the same time, the founder of the company, Elon Musk, noted that the automaker would not convert the received cryptocurrency into fiat money (money familiar to all of us).

Even earlier, in early February 2021, Tesla acquired $ 1,5 billion worth of bitcoins. By itself, this transaction would not have affected the bitcoin market, whose capitalization exceeded one trillion dollars, but the very fact of the official recognition of the cryptocurrency by a large company, which announced the diversification of its own funds in this way, had a positive effect on the rate of cryptocurrencies.

True, very soon - already in May 2021, Elon Musk made a statement that Tesla was suspending the sale of electric cars for bitcoins. The head of the company said that the automaker will not accept cryptocurrency until it is mined using sustainable energy sources that do not harm the environment.

On Twitter, Elon Musk wrote that Tesla is concerned about the rapidly growing use of fossil fuels in the world, primarily coal, which has the worst emissions among all types of fuel, for mining cryptocurrencies and conducting operations with bitcoin. Elon Musk noted that the company cannot afford to harm the environment.

For the automaker, which relied on electric cars, this is an understandable position, however, in February and March 2021, concern for the ecology of the Earth did not interfere with the company in any way, allowing it to make money on the resale of existing Bitcoins due to a profitable exchange rate difference.

It is known that at the end of March, the company sold $ 272 million worth of bitcoins, showing a profit of $ 101 million on this one transaction. This allowed the company to post a record quarterly profit in stories in the amount of $ 438 million.

So in business matters, the carbon footprint sometimes fades into the background, especially when it is very beneficial for the development of the company.

Cryptocurrencies are partially powered by renewable energy

Today, many copies break when deciding what energy is used to mine cryptocurrencies?

It is known that a large number of crypto farms are concentrated today in Scandinavia and in Russia in Siberia. This is due to low air temperatures, which allows cryptocurrency mining business creators to save money on cooling farms. At the same time, in Scandinavia, for the extraction of cryptocurrencies, renewable energy is more often used, which does not leave a carbon footprint in the Earth's atmosphere.

Estimates of what kind of energy is being used to generate bitcoin differ significantly.

For example, experts from the already mentioned Cambridge University believe that now from 29 to 39 percent of the electricity used by miners is already renewable.

Industrial crypto farm of the Canadian company Bitfarms

At the same time, according to estimates by the British investment firm CoinShares, the total share of renewable energy in bitcoin mining has already reached 73 percent. This forecast is based on the fact that most of the large mining centers located in Scandinavia or Southwest China are located in regions with excellent hydropower development. By the way, this is also typical for Siberia, where almost 50 percent of electricity is generated at hydroelectric power plants.

Many countries in which large crypto farms operate are developing alternative energy based on renewable sources. The same Scandinavia has made a huge step in the development of wind energy. China follows the same path, which is actively developing solar and wind power plants, significantly ahead of the United States in this direction.

Another interesting observation is that electricity can be used to generate bitcoin and maintain its ecosystem, which has already been generated, but is not needed by anyone. That is, it has already been produced, but there are simply not enough consumers to use it all. There are regions in the world in which the production of electricity exceeds the needs of the population and industry.

Such places are a real godsend for miners, as the surplus of electricity often promises low prices. Here, the carbon footprint from electricity generation has already been left, if we are not talking about renewable energy sources. Therefore, mining cryptocurrency will not add any new emissions.

Instead of an epilogue

The question of whether cryptocurrencies affect the ecology of the planet remains controversial.

In many ways, the position on this issue depends on how a person himself relates to bitcoin or ether. For those who consider these currencies to be quackery and another financial bubble, it is easier to believe in the negative impact of cryptocurrency mining on the global environment.

At the same time, of course, cryptocurrencies are already having an impact on the ecology of the Earth. Half a percent of global electricity consumption just to support bitcoin is already a noticeable impact. But here it is worth understanding that cryptocurrency mining is just the tip of the iceberg.

A huge amount of energy and resources is spent on the production of various computer hardware, the development and release of new chips and video cards, which are necessary for the extraction of cryptocurrency. Such production itself consumes a huge amount of resources, including rare earths and precious metals that still need to be mined. At the same time, the further production of printed circuit boards is in itself environmentally harmful, and the boards themselves are non-degradable material in nature.

And here you can use the evaluative approach. Obviously, in comparison with various industries, the mining of cryptocurrencies at this stage of its development does not have a significant impact on the ecology of the Earth. The same automotive industry is a much dirtier production, both during the production of cars and during the further disposal of automotive equipment. And it doesn't matter whether we are talking about cars with internal combustion engines or about "green" electric cars.
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  1. Anachoret
    Anachoret 19 July 2021 15: 22
    Cryptocurrencies can have an impact on the construction of hydropower plants in the Siberian part of the country, where previously the design capacity and cost of construction were considered unreasonable due to the remoteness from the market for the consumption of this energy), so this is another opportunity for Russia and for reducing the carbon footprint in the Russian economy as a whole)
    1. Dym71
      Dym71 19 July 2021 15: 36
      Quote: Anchorite
      Cryptocurrencies and may have an impact on the construction of hydropower plants in the Siberian part of the country

      And also for the development of the nuclear power plant network in Iran wassat
      1. Vadim237
        Vadim237 19 July 2021 18: 19
        As thermonuclear energy appears, then in general, manna from heaven will begin and not only for crypto currency dealers.
        1. Dym71
          Dym71 20 July 2021 10: 08
          Quote: Vadim237
          As thermonuclear energy appears, then in general, manna from heaven will begin and not only for crypto currency dealers.

          The main thing is that this heavenly manna does not overwhelm us at the very least. yes
      2. EvilLion
        EvilLion 20 July 2021 16: 22
        Iran doesn’t care, it’s easier for it to build thermal power plants and heat them with oil, which they don’t buy from it anyway. And the West will give him dollars without getting anything in return. Which is even ironic. Tracking where the cue balls are going is, as stated, impossible. Although we have already seen how things are with them.
    2. Proton
      Proton 19 July 2021 16: 03
      To be honest, I don’t understand what you said.
      How can you influence the construction of hydropower plants by mining? Those. will new hydroelectric power plants be built for mining? I have not heard of such projects.
      Now at the cost of construction and remoteness from sales markets. I recommend that you carefully study who the consumers of the Angarsk and Yenisei cascades of generation are. You will learn that the consumers of these capacities are located right next to each other, right there in Siberia.
      Well, the cost of construction primarily depends on the installed capacity of the station and the conditions for water accumulation. The rest fades into the background.
    3. EvilLion
      EvilLion 20 July 2021 16: 20
      For those who have not taught history, and explaining energy is useless. DneproHES was built without consumers, they were created only later. Because first the plan, then the power plant, then everything else. So there will be a desire to build production, they will also build a hydroelectric power station, and most importantly, the power line will stretch out, otherwise this hydroelectric power station is needed if you can't take current from it, and build a hydroelectric power station only for the farm of cue ball - this is only logic for Iran, which is easier oil to burn and get dollars for it, since this same oil is not bought from him. Incidentally, it’s strange that bitters from China did not rush there.
  2. Compasure
    Compasure 19 July 2021 15: 47
    The author leaves a carbon footprint too, especially when he eats pea soup! wink
  3. depressant
    depressant 19 July 2021 18: 14
    Norilsk Nickel has launched its own digital tokens for settlements with its production partners. They are launched on the basis of the Swiss blockchain platform Atomyze and are backed by all the metals produced by the company. The first partners of Norilsk Nickel who agreed to settle accounts with it in virtual money were the international companies Traxys and Umicore.
    1. Undecim
      Undecim 19 July 2021 18: 36
      In this case, the token is not a cryptocurrency.
      1. depressant
        depressant 19 July 2021 19: 23
        Yes, but Norilsk Nickel pays with this currency with its partners, and they accept it. And they spend energy on it, and on the cheap.
        1. Undecim
          Undecim 19 July 2021 20: 54
          They do not pay with tokens. They trade them. This is called asset tokenization.
          1. depressant
            depressant 19 July 2021 20: 56
            Viktor Nikolaevich, I have somewhat different information, but I will not argue with you, relying on your wisdom))).
            1. Undecim
              Undecim 19 July 2021 21: 06
              Not worth it, because here the question is not wisdom, but awareness. It is possible that my information is wrong. Although I have information from the Norilsk Nickel website. But maybe you have access to more informed sources.
              1. depressant
                depressant 19 July 2021 21: 44
                Mining of these same tokens is organized by Norilsk Nickel at one of its enterprises, which was closed in 2016 due to the profitability of mining. Firstly, the electricity is own, and secondly - the Arctic, it is cold, which is extremely useful for equipment that generates a huge amount of heat.
                As for what is happening with generation in Norilsk.
                Here is a crypto farm for mining bitcoin. Industrial mining operator BitCluster launched it at the end of 2020.
                BitCluster is an international infrastructure project headquartered in Switzerland, which has opened data centers in the Ivanovo region, Angarsk, Bratsk and Norilsk since June 2017. The BitCluster Nord data center in Norilsk opened in October 2020. So far, the capacity of the crypto farm in Norilsk is 11,2 MW, but in 2021 it is planned to increase it to 31 MW, which will allow mining up to six bitcoins per day. According to Coinmarketcap, six bitcoins at the time of the first generation in Norilsk were worth $ 228 (000 million rubles). BitCluster Nord hardware in this city of ours belongs to clients from all over the world, including Switzerland, the USA and Japan, as well as one of the co-founders of BitCluster - Vitaly Borshchenko. At the same time, it is not known whether any of this production is dripping to our budget or not. And it is not clear how the production of tokens by Potanin has anything to do with this. Perhaps these are different productions, and the alleged usefulness of electronic Potanin rubles covers the BitCluster parasitic on our resources. But as they say, since there is no own equipment for the production of bitcoins, then there is nothing to wave fists.
                1. Undecim
                  Undecim 19 July 2021 22: 14
                  Bitcoin and token are different things.
                  And the device of mining farms on energy-consuming sites is a popular topic today. At our ferroalloy plant, Kolomoisky has also launched a farm and will continue to expand.
                  1. depressant
                    depressant 19 July 2021 22: 19
                    At the same time, it is characteristic that the circulation of cryptocurrency is legally prohibited in our country. Let the foreigners pump it, they cannot and cannot pay for their own - it is not under the control of the tax authorities.
                    1. Undecim
                      Undecim 19 July 2021 22: 32
                      The right status of cryptocurrency is a separate topic.
                2. EvilLion
                  EvilLion 20 July 2021 16: 16
                  Nothing drips, they just steal electricity.
  4. nikvic46
    nikvic46 19 July 2021 18: 14
    I heard about energy consumption per unit of production. But to the contrary ....?
  5. bandabas
    bandabas 19 July 2021 18: 49
    Yah. Abkhazians are hooked on mining with might and main. Freeloader people. All that would not work.
  6. Ryaruav
    Ryaruav 19 July 2021 19: 53
    nothing comes out of nothing (the law of conservation of energy), of course, except for the fiercely advertised financial pyramids
    1. Mustached Kok
      Mustached Kok 19 July 2021 20: 56
      In this case, this is not suitable. Cryptocurrency acquires a price not out of "nothing" And because of the contribution of electricity. Relatively speaking, the price of 1 bitcoin is built relative to the price of electricity spent on its creation. So the price is not taken out of thin air
  7. cniza
    cniza 19 July 2021 20: 59
    Half a percent of global electricity consumption just to support bitcoin is already a noticeable impact.

    All this can be both blown up and blown away, but who can do it is the main influencer, and bitcoin or another cryptocurrency is just a tool ...
  8. Motorist
    Motorist 19 July 2021 22: 11
    As I understand it, crypto money is a payment for using computing power. These calculations would take place without bitcoins, simply because they are needed. Thus, cryptocurrency has a zero impact on the environment: if you hadn't thought of it, you would still spend the same terawatts on the Internet, and so on.
    1. Roman070280
      Roman070280 20 July 2021 12: 23
      payment for the use of computing power. These calculations would take place without bitcoins - simply because they are necessary

      And what kind of such necessary calculations suddenly appeared, the need for which was not previously?
      1. Motorist
        Motorist 20 July 2021 19: 36
        Quote: Roman070280
        And what kind of such necessary calculations suddenly appeared, the need for which was not previously?

        I don't know exactly, I can only guess. Ten years ago there was a Blackberry phone, and now I personally know few people who use Nokia instead of a smartphone. Tick-toks are all sorts of streaming services, Instagram, 5G, WiFi on every corner. Even this comment is already 0,5 kb (text only).
    2. EvilLion
      EvilLion 20 July 2021 16: 14
      Bitcoin is farming on specialized boards that can't do anything else. Do not understand the issue - do not write nonsense. That is, this is the theft not only of energy for the sake of some garbage, but also of raw materials from production. capacities that could be used for something more useful.

      As for video cards, it is in game modes that gaming video cards are used only for a few hours a day, while their load in games is far from always 100%, since people play from the vert. synchronization, and in old games that do not load modern hardware, and it stupidly happens that the percent cannot load the video. But comp. games are at least meaningful entertainment, and cue ball farming is just a redistribution of dollars into your pocket due to the consumption of electricity (preferably someone else's).
      1. Motorist
        Motorist 20 July 2021 19: 44
        Quote: EvilLion
        Do not understand the issue - do not write nonsense.

        Eh, polite! Are you a writer here, sort of? Then you know better than readers that any comment is IMHO by default. To enhance the effect, I wrote "As I understand it ..."
  9. EvilLion
    EvilLion 20 July 2021 16: 08
    Any crypt is simply theft of electricity from civilization. And no liberal nonsense that miners pay taxes (rather they steal electricity from other consumers), etc., are nothing more than nonsense, because without energy, no work or transportation of products is possible, and any free energy in the world is immediately finds application.