Business PickupSince its inception in 2009, cryptocurrency has seen explosive growth. Bitcoin was the first to emerge, and despite its name, doesn’t involve any actual coins. Instead, all cryptocurrency is managed by balances kept on a public ledger known as the blockchain. While bitcoin still isn’t considered a legal tender in nearly all nations (with El Salvador currently being the only exception), it has laid the foundation for hundreds of other cryptocurrencies (sometimes referred to as “altcoins”). Proponents of cryptocurrency are drawn to the convenience and security it provides, but there’s also a darker side: the currency requires considerable energy to run and is responsible for significant amounts of e-waste.
What Are the Environmental Implications of Cryptocurrency?
The cryptocurrency system operates on a vast collection of computers, sometimes called “nodes” or “miners,” which run the code required to manage the blockchain network. Users mine new coins with customized computer chips, recording and tracking who owns each one in the massive blockchain database. As more currency is generated and transactions are performed, more computing power is needed.
Running cryptocurrency requires a tremendous amount of energy. In fact, cryptocurrency operations are responsible for at least 20% of the energy used by the world’s data centers. Roughly 75% of all bitcoin operations are in China, where energy sources such as power stations fueled by coal are used. In fact, nearly two-thirds of bitcoin mining is powered by fossil fuels, a major contributor of carbon dioxide emissions.
Beyond energy-related concerns, e-waste caused by cryptocurrency is also a growing problem. A decade ago, bitcoin mining and storage could be managed with the average laptop. Now, bitcoin miners typically replace their specialized computers with more efficient models each year to save on energy costs and increase computer power. Since the computers are built exclusively for the purpose of powering cryptocurrency, they often go straight in the trash when miners are done with them. This results in the creation of thousands of tonnes of electronic waste each year. To put this into perspective, a single bitcoin transaction creates 1.77 golf balls’ worth of waste, and hundreds of thousands of transactions are performed each day.
What Can Be Done to Tackle the E-Waste Problem?
To reduce cryptocurrency’s enormous energy footprint, a less computer-heavy method must be implemented. Experts suggest tweaking the mining method using a “proof-of-stake” mechanism that doesn’t rely on computing power, practices are already in place for a few cryptocurrencies, including Dash and NXT. This approach would cut energy consumption by 99.99% and would virtually eliminate the need for specialized hardware that cannot be repurposed at the end of its initial lifespan. Yet, to be effective, this change would require the entire network to adopt the new mining mechanism.
In the meantime, hardware that cannot be repurposed should be properly disposed. Even computers that cannot reenter the market should not wind up in landfills, as some components may still be recyclable.
For electronics that can’t be repurposed (and those that can), partnering with a responsible recycling team like Quantum will ensure compliance with environmental regulations and help to reduce e-waste across all industries. Learn more about our electronics recycling options here.