A single Bitcoin transaction generates the same amount of electronic waste as throwing two iPhones in the trash, according to a new analysis by economists from the Dutch Central Bank and the Massachusetts Institute of Technology.
While the carbon footprint of Bitcoin has been well studied, less attention has been paid to the massive change in computers used to mine cryptocurrency.
Specialized computer chips called ASICs are sold with no other purpose than to run the algorithms that secure the Bitcoin network, a process called “bitcoin mining” that rewards those who participate in recording Bitcoin transactions. But because only the latest chips are energy-efficient enough to mine profitably, efficient miners constantly need to replace ASICs with newer, more powerful ones.
“Bitcoin miners are still only 1.29 years old,” researchers Alex de Vries and Christian Stoll wrote in the paper on the growing e-waste problem associated with Bitcoin mining published in Resources, Conservation and Recycling. .
As a result, “We estimate that the entire Bitcoin network currently cycles through 30.7 kilometric tons of equipment per year. This number is comparable to the amount of small telecommunications equipment waste produced by a country like the Netherlands,” the researchers added.
In 2020, the Bitcoin network processed 112.5 million transactions (compared to 539 billion processed by traditional payment service providers in 2019), according to economists, meaning that each individual transaction “is equivalent to at least 272 grams of e-waste.” And this is the weight of my iPhone 12.
The reason e-waste is such a problem for cryptocurrencies is that, unlike most computing devices, ASIC chips have no alternative use other than bitcoin mining, and if they cannot be used to mine bitcoin profitably, they will have no future purpose whatsoever.
The researchers note that it is theoretically possible for these devices to regain their ability to operate profitably at a later time, if Bitcoin prices suddenly increase and mining income increases.
They add, “However, there are several factors that generally prevent the life of mining hardware from being significantly extended. It costs money to store mining hardware, and the longer it is stored, the less likely it is to be profitable.”
The research authors also warn that the e-waste problem will likely increase if the price of Bitcoin continues to rise, as it will stimulate more investment in and replacement of ASIC hardware.
The research paper concluded that if society wanted to reduce the e-waste problem, it would need to replace the “entire Bitcoin mining process with a more sustainable alternative.”
Other bitcoin alternatives have been less successful in reducing their environmental impact. Chia, a cryptocurrency based on the “time-and-place” algorithm, has been accused of leading to a shortage of hard drives, a type of storage media common in fast computers.
Cryptocurrency expert David Gerrard continued, “Instead of just wasting electricity, Chia is devouring SSDs at an astonishing rate, and it has completely destroyed the large hard drive market.”