Extracting a dollar’s worth of cryptocurrency such as bitcoin from the deep Web consumes three times more energy than digging up a dollar’s worth of gold, researchers said Monday.
There are now hundreds of virtual currencies and an unknown number of server farms around the world running around the clock to unearth them, more than half of them in China, according to a recent report from the University of Cambridge.
Mining virtual currencies with a real-world value, in other words, carries a hidden environmental cost that is rarely measured or taken into account.
“We now have an entirely new industry that is consuming more energy per year than many countries,” said Max Krause, a researcher at the Oak Ridge Institute for Science and Education and lead author of a study in the journal Nature Sustainability.
“In 2018, bitcoin is on track to consume more energy than Denmark,” he told AFP.
Denmark consumed 31.4 billion kilowatt hours in electricity in 2015. As of July 1 of this year, Bitcoin mining used up approximately 30.1 billion kilowatt hours, according to the study.
The highly competitive practice of mining cryptocurrencies requires hundreds, even tens of thousands, of linked computers running intensive calculations in search of the Internet equivalent of precious metals.
New coins are awarded to those who complete calculations first, with the transaction confirmed and entered into the currency’s shared public ledger, known as the “blockchain”.
The top 100 cryptocurrencies have a current market value of about $200 billion (175 billion euros), according to the website coinmarketcap.com.
Bitcoin accounts for more than half of that amount.
“We wanted to spread awareness about the potential environmental costs for mining cryptocurrencies,” Krause said.