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Bitcoin mining wastes more energy than mining for gold. Now we can harness that energy for good.
Cryptocurrency energy usage is enormous, and so is its carbon footprint. Now, a new study puts the environmental impact of the crypto mining industry into perspective by comparing it to the energy it takes to mine for precious metals — and the findings are shocking.
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The study found that mining for major cryptocurrencies like Bitcoin uses more energy than conventional mining for gold — up to three times as much.
The study is the first to draw a direct comparison between mining one dollar worth of Bitcoin and mining one dollar of gold and the ugly truth is that Bitcoin needs a staggering amount of electricity just to keep pace.
The trouble is, for the most part, this energy isn’t coming from clean sources. Most of it is drawn from power stations burning fossil fuels and pumping tons of CO2 into the atmosphere.
Bitcoin’s Massive Carbon Footprint
On top of these new revelations, an earlier study found that Bitcoin mining was considerably more polluting than gold mining. Not only does it take more energy to mine for bitcoins, but the industry’s carbon footprint is larger too.
In the study by digiconimist, the authors concluded that every kilogram of gold mined resulted in a carbon footprint of 20 tons of CO2e. In comparison, the Bitcoin equivalent left a carbon footprint of almost 33 tons of CO2e.
What Do Cryptocurrency Miners Actually Do?
To understand these findings you need to understand what Bitcoin, and other cryptocurrency miners actually do.
Bitcoin is the original cryptocurrency, but many have followed. These currencies are digital, anyone can own or transfer them, and unlike a dollar, they aren’t issued by a central authority.
“Mining” is the process of verifying, completing, and recording transactions. Each transaction on the Bitcoin network needs to be validated before it goes through, and then recorded on a digital ledger, called the blockchain. This process is vital for the security of the network.
Why Cryptocurrency Mining is so Damaging
Bitcoin, along with many cryptocurrencies, uses what’s known as a Proof of Work consensus algorithm for mining. In a Proof of Work system, miners compete to find the answer to a complex mathematical puzzle in order to generate the hash that will allow them to attach a block to the chain. Winners are rewarded with newly-minted bitcoins.
To find the answer, miners make as many guesses as possible and hope their computer is the first to get it right. “The more machines you run, and the higher their calculation performance, the better your odds are of winning,” says Anthony Khamsei, CEO of Resistance.
Massive warehouses running specialized computers have cropped up across the globe. And as competition stiffens, miners are incentivized to burn even more electricity.
Your Laptop Won’t Cut It
CPUs, the processors found in regular computers, can make calculations at a certain rate, but more advanced GPUs can perform these calculations at a higher rate, so people eventually started to use them for Bitcoin mining.
Then came FPGAs, and finally ASICs, Application-Specific Integrated Circuits, that could perform certain hash functions for the algorithm they were optimized for in orders of magnitude faster than a CPU.
Cue the ASIC mining farm, massive operations that, in the most part, use cheap electricity sourced from coal-burning power plants to make as much money as possible.
A Wasteful Mining System Running Useless Calculations
Between 2016 and 2018, four of the biggest cryptocurrencies, Bitcoin, Ethereum, Litecoin, and Monero together pumped up to 15 million tons of CO2 into the atmosphere.
In another study, researchers placed that figure much higher, at 69 million metric tons in a single year from Bitcoin alone, enough to raise global temperatures by 2°C by 2033.
Today, Bitcoin uses enough energy to power one million transatlantic flights and sucks up more electricity than New Zealand and Hungary per year.
Ignoring the environmental impact of cryptocurrency mining could be disastrous. Yet cryptocurrencies are also poised to transform our financial systems for the better, bring economic opportunities to impoverished countries, and propel scientific advancements.
If the benefits of cryptocurrencies are going to outweigh their costs, an alternative to Proof of Work mining is urgently needed.
This Other Method Slashes Energy Waste and Helps Power Scientific Breakthroughs
Fortunately, there is a way of taking this energy and directing it into real scientific research projects.
Proof of Research puts the energy used in mining to good use. Instead of gobbling up electricity for useless calculations, users’ computing power is diverted to scientific projects.
Individual users can choose to use a green energy supplier to power their laptops and participate in Proof of Research instead of mining farms that just opt for the cheapest option.
One innovative blockchain platform, Resistance, is using a reward splitting mechanism to divert energy consumption away from traditional mining and into important whitelisted research projects.
On Resistance, rewards are split four ways: Proof of Work (miners are still needed to secure the blockchain), Proof of Research, masternodes (a complex security measure that helps the network run smoothly), and project development.
The reward for Proof of Work, Proof of Research, and masternodes is the same: 30%.
Proof of Research on Resistance allows users to help with cutting-edge research through the Berkeley Open Infrastructure for Network Computing, or BOINC.
BOINC allows projects like World Community Grid to use idle computer time on hundreds of thousands of volunteer computers to help solve serious health and social problems. By the time a World Community Grid project ends, more than 20,000 years of computing will have been done.
In exchange for donating their CPUs to science, Resistance Proof of Research participants receive a percentage of each newly-minted coin, effectively getting paid to make a positive contribution to humanity.
3 Steps to Becoming a Research Scientist
- Download the BOINC client: BOINC works by downloading small computing jobs to your computer and running them in the background. Anyone with a regular laptop or desktop computer can join in and reap the rewards.
- Download the Resistance wallet and join the pool: All Proof of Research rewards end up in the pool wallet. By joining the Resistance pool, users can claim a proportion of the wallet balance in relation to the computing power they have donated.
- Choose a task: Tasks range from cancer and Alzheimer’s research, to environmental projects dealing with clean water technology and solar power.
With a large network of computers, scientists can crunch huge amounts of data and work fast to discover solutions to climate change, global health crises, and more. In this way, Proof of Research can counterbalance the environmental impact of cryptocurrency networks, and ensure they remain viable for years to come.
Note: Resistance CEO Anthony Khamsei and CFO Harry Li will discuss the environmental impact of cryptocurrency mining at Blockchain Park, part of the official schedule for the upcoming World Economic Forum in Davos, Switzerland, 22 – 25 January 2019.