A single bitcoin transaction generates the same amount of e-waste as throwing two iPhones in the trash, according to a new analysis from economists at the Dutch central bank and MIT.
While bitcoin’s carbon footprint is well studied, less attention has been paid to the vast churn rate of computer hardware that cryptocurrency induces. Specialized computer chips called ASICs are sold for no other purpose than to run the algorithms that secure the bitcoin network, a process called mining that rewards those who participate in bitcoin payments. But because only the latest chips are energy efficient enough to operate profitably, efficient miners must constantly replace their ASICs with newer, more powerful ones.
“The lifespan of bitcoin mining devices remains limited to only 1.29 years,” write researchers Alex de Vries and Christian Stoll in the article, Bitcoin’s growing e-waste problem, published in the journal Resources , Conservation and Recycling.
“As a result, we estimate that the entire bitcoin network is currently traversing 30.7 kilotons of equipment per year. This number is comparable to the amount of small waste IT and telecommunications equipment produced by a country like the Netherlands.
In 2020, the bitcoin network processed 112.5 million transactions (up from 539 billion processed by traditional payment service providers in 2019), according to economists, which means that each individual transaction “equates to at least 272g of electronic waste ”. That’s the weight of two iPhone 12 minis.
The reason that e-waste is such a problem for cryptocurrency is that, unlike most computer hardware, ASICs have no other use than mining bitcoin, and if they cannot not be used to mine bitcoin profitably, they have no future purpose. It is theoretically possible that these devices regain the ability to operate profitably at a later point in time if bitcoin prices suddenly rise and increase mining revenues, the authors note.
“However, several factors generally prevent a substantial extension of the life of mining devices,” they add. Storing mining equipment costs money, and the longer it is stored, the less likely it will be profitable.
The authors also warn that the problem of e-waste is likely to increase further if the price of bitcoin continues to rise, as this will provide an incentive to invest more and replace ASIC hardware.
If the community tried to reduce its e-waste problem, the document concludes, it would have to replace the entire bitcoin mining process “in its entirety with a more sustainable alternative,” and the document suggests a “proof of stake,” a experimental method. replacement. Ethereum, a successor to bitcoin, announced in May its intention to switch to proof of stake in a few months, although the switch has yet to take place.
Other alternatives to bitcoin have been less successful in limiting their environmental footprint. Chia, a cryptocurrency based on a ‘time and space proof’ algorithm, has been accused of causing shortages of hard drives and SSDs, a type of storage medium popular in fast computers. “Instead of just wasting electricity, Chia is chewing SSDs at a fantastic rate and has also completely destroyed the large hard drive market,” said David Gerard, a cryptocurrency expert.