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The Bitcoin network generates as much e-waste as the Netherlands

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The Bitcoin network generates as much e-waste as the Netherlands

And it will consume as much energy as Pakistan this year

The amount of e-waste a single Bitcoin transaction generates is equivalent to throwing two iPhones in the bin, according to a new study by researchers from MIT and the Dutch central bank.

The study, published in Science Direct, estimates that the whole Bitcoin network generates as much as 30.7 metric kilotons of e-waste every year: comparable to the amount of small IT and telecommunication equipment waste produced by a country like the Netherlands.

Last year, the network processed 112.5 million transactions, according to researchers, meaning that each transaction generated an average 272g of e-waste (the weight of two iPhone 12 Minis).

The study estimates that Bitcoin mining could produce as much as 64.4 metric kilotons of e-waste annually, at the peak price levels seen in early 2021.

The reason for this massive amounts of e-waste is that mining - the process of generating new Bitcoins - uses specialised single-purpose computer chips, called application-specific integrated circuit (ASICs). These have no other purpose than to run the algorithms that secure the Bitcoin network.

Generally, each ASIC miner is built to mine a specific digital currency, meaning that a Bitcoin ASIC miner can only mine Bitcoin. The ASICs become obsolete roughly every 1.3 years, say the researchers, necessitating replacements.

All of the participating miners in the Bitcoin network compete with each other for the reward of creating a new block for Bitcoin's underlying blockchain. The chance of generating a new block is proportional to the mining machine's share of the total computational power used for mining.

Effective miners therefore have to constantly replace their ASICs with newer chips that are efficient enough to mine profitably. A machine that can carry out more computations per unit of energy is considered more profitable.

According to the University of Cambridge Bitcoin Electricity consumption index, Bitcoin mining consumes about 100 Terawatt Hours in a single year, with consumption going up as Bitcoin's value rises.

According to a recent report by Bloomberg, the total power consumed by the Bitcoin network this year has already crossed the 2020 consumption level of around 67 terawatt-hours (TWh). It is expected to consume 91TWh of energy by the end of the year: as much as Pakistan.

The mining process undoubtedly has a negative impact on the environment.

In 2018, a report by Jon Truby, assistant professor of the Centre for Law and Development at Qatar University, went so far as to claim that failing to lower the energy use of such technologies could prevent some nations from reaching their climate-change obligations under the Paris Agreement.

The report recommended new taxes, charges, or restrictions to reduce demand by users, miners, and mining chip manufacturers who employ polluting technologies, and to offer incentives that encourage developers to create less energy-intensive or carbon-neutral blockchains.

The Bitcoin network generates as much e-waste as the Netherlands

And it will consume as much energy as Pakistan this year

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