Today, Bitcoin consumes as much energy as a small country. This certainly sounds alarming, but the reality is a little more complex.
Our clients design and build generators installed for data centers, factories, distribution centers, commercial buildings, office buildings, grocery stores, and banks for emergency backup, peak shaving, or continuous power. Bitcoin miners utilize data centers for housing and managing their data (server) farms.
Bitcoin is a digital currency powered by many computers worldwide working to maintain the Bitcoin blockchain, a public database of all transactions on the network ever made. Bitcoin miners compete to officially record and verify the transaction and earn bitcoin as a reward. These transactions are verified by solving complex cryptographic and mathematical problems for which Bitcoin miners use a lot of power. The computers that record and verify Bitcoin transactions consume power at a level similar to some countries. The exact amount of energy used by a Bitcoin transaction can vary based on demand.
Cryptocurrency Mining Farm
The environmental impact of the Bitcoin network depends on power consumption, the kind of energy powering the network, and the electronic waste it generates. The four main factors in how much electricity a Bitcoin miner uses are; hardware computing power, network hash rate, mining difficulty, and thermal regulation for the hardware. Together, they use more electricity than many countries. The more powerful computers may also require more power off the electricity grid, making the entire mining network a giant energy hog.
The cryptocurrency equipment required for Bitcoin mining cannot be recycled for different applications. Some mining equipment components also include aluminum, copper, iron, and rare earth metals. These generate massive amounts of electronic waste in the form of computer hardware. Some researchers believe that less than ideal recycling and waste collection in countries that have large mining operations could create a risk of toxic metals polluting the soil, water, and air in those countries.
With upgrades to the cryptocurrency landscape, including the addition of more efficient currencies and upgrades to existing networks, it may be possible to find the best of both worlds at some point in the future, with energy-efficient cryptocurrencies powered by renewable electricity.
For today, however, mining bitcoin has a high environmental and energy cost; as our clients migrate into the complex world of IoT, they’ll need to consider the challenges of managing the cryptocurrency market. PSR
John Krzesicki is Business Development Manager at Power Systems Research
