The energy needed to mine $1 worth of Bitcoin is more expensive than the energy needed to mine $1 of physical gold.
According to published research by The Nature International Journal of Science, Max Krause, a research engineer at the Oak Ridge Institute for Science and Education, and Thabet Tolaymat of the Environmental Protection Agency, mining cryptocurrency takes nearly twice as much energy than mining gold, platinum, and copper.
Bitcoin on its own, needs three times as much energy to mine if compared to gold.
The researchers came into that conclusion after tracking the daily energy demand and hashrate of Bitcoin, Ethereum, Litecoin, and Monero between 1st January 2016 to 30th June 2018.
The researchers then used the average daily market prices of each cryptocurrency and the respective incentives given to miners after successfully mining a block, to calculate how much energy it takes to generate one U.S. dollar worth of each respective cryptocurrency.
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The research found that Bitcoin, Ethereum, Litecoin, and Monero consumed 17, 7, 7, and 14 megajoules of energy, respectively, to mine $1 worth of each cryptocurrency.
It's worth noting that the estimates are at the lower end of the spectrum, because it didn't include energy costs for cooling equipment used in cryptomining, as well as the cost for maintenance and infrastructure.
During their research, the team also noticed an increase in hashrate of the four tracked cryptocurrencies. This suggests that the energy requirements to mine those digital coins are still rising, irrespective to each of the coin's price.
Since electricity used by the general population is mostly generated from fossil fuels, like coal and gas, its usage can have a significant environmental impact. During the research period, it was concluded that “mining for all four cryptocurrencies was responsible for 3-15 million tonnes of CO2 emissions”, they say.
The pair also noted that any cryptocurrency mined in China generates four times the amount of CO2 compared to one in Canada. In addition, according to the Bitcoin Energy Consumption Index, Bitcoin mining uses about as much energy as the entire country of Austria.
As a matter of fact, mining Bitcoins consumes more energy than 20 countries in Europe.
This further highlight the inefficiency of mining cryptocurrencies and how it is generally bad for the environment.
The debate over the effects of cryptocurrency mining on the environment is nothing new. In fact, a study conducted by the University of Hawaii concluded that the electricity demands of Bitcoin mining could produce enough CO2 emissions to single-handedly raise global temperatures by 2 degrees celsius by 2023.
This trend won't end anytime soon as cryptocurrency adoption continues to rise.
"If we hope to use cryptocurrencies in the future as a separate currency from a dollar or a euro, are we willing to invest this much energy?” Krause asked. "[That's] what we're posing as a question."