Energy Cost of Mining Gold, Copper Is Less Than Bitcoin Mining Cost

A high school student who came from a small town in India on Monday 5 November threatened to blow up Miami airport after the Federal Bureau of Investigation (FBI) refused to help him retrieve the Bitcoins lost to a US-based fraudster.

Needless to say, the wild madness surrounding the crypto currency is not over yet, even though it took a huge fall last December. While this incident has alerted both the FBI and the Indian National Investigation Agency (NIA), new investigations suggest that we need to be more concerned with Bitcoin than a rogue teenager.

According to a new study, Bitcoin mining consumes more than twice as much energy as gold and copper mining. These numbers are identical for other common Kyrpto currencies such as Ethereum, Litecoin and Monero. As a reference, mining a crypto currency is a calculation process in which a network confirms the transaction and adds a new block to the public ledger called the blockchain. The person who uses the processing power to add a new block to the ledger receives a crypto currency as a reward for their efforts.

Researchers at the Oak Ridge Institute in Cincinnati, Ohio, found that Bitcoin, Ethereum, Litecoin and Monero used an average of 17, 7, 7 and 14 million joules of energy to generate $1. In contrast, conventional mining of aluminum, copper, gold and platinum consumed only 122, 4, 5 and 7 million joules of energy to produce $1.

This suggests that the extraction of crypto currencies (with the exception of aluminium) requires more energy than the extraction of minerals in order to achieve a corresponding market value. The degradation of crypto currencies not only consumed a lot of energy, but also leaves a huge carbon foot print.

In order to take account of the price fluctuations of crypto currencies, the researchers have limited their research time from 1 January 2016 to 30 June 2018.

They found that the degradation of all four crypto currencies during the period was responsible for 3 to 15 million tonnes of carbon dioxide emissions. They also found that a crypto currency mined in China would produce four times more carbon dioxide than the virtual currency mined in Canada.

In the long term, the viability of cryto currencies on the market will depend not only on their environmental impact but also on energy consumption.