Concerns about bitcoin’s environmental impact have surfaced despite its rising prominence, as are criticizing bitcoin mining process for using a tremendous amount of energy.
Because of this, the US Treasury Secretary warned of “staggering” demand for Bitcoin energy and called it “grossly inefficient.”
In February U.S. Treasury Secretary Janet Yellen had voiced her concerns about cryptocurrencies. She told network host Andrew Ross Sorkin: “I don’t think bitcoin… is widely used as a transactional mechanism. This is a highly inefficient way to conduct transactions, and the amount of energy consumed to process these transactions is staggering.”
Bitcoin mining is highly energy-intensive – and was designed to be. According to the Cambridge Bitcoin Electricity Consumption Index (CBECI), cryptocurrency mining uses 128.84 terawatt-hours each year, with this amount being much more than the annual consumption of Argentina and Ukraine.
When bitcoin first appeared in 2009, it was still possible to mine cryptocurrency on a regular computer. There are only 21 million bitcoins that can be mined, and this requires solving complex mathematical problems on a computer.
However, the math problems are getting more difficult as the number of bitcoins to be issued gets smaller and smaller. Currently, 18.5 million bitcoins have been given, which makes the average computer insufficient for complex algorithms.
“People want this income, which will motivate them to implement more and more powerful machines to guess this random number. And therefore, you will see an increase in energy consumption.”
In addition, the absence of a government agency or organization that monitors where bitcoin is mined and what kind of energy miners use makes it difficult to be transparent. Thus, there is no way to know if miners use fossil fuels or renewable energy sources for their activities.
These are not all the problems – as mining crypto farms use a considerable number of computers, where breakdowns and wear of parts regularly occur, making this process even dirtier, since crypto farmers do not recycle parts.