What is cryptocurrency?
A cryptocurrency is a form of digital currency that can be exchanged or sold online for goods and services. Cryptocurrency runs on a decentralized technology called blockchain. This means there’s no singular authority or government body controlling the currency. Blockchain acts as a digital ledger that keeps track of all your digital cryptocurrency transactions.
There are several different cryptocurrencies available in the market such as Bitcoin (the first coin), Ethereum, Tether, Dogecoin, Litecoin, etc.
What is cryptocurrency mining?
Cryptocurrency mining, or cryptomining, is a process of obtaining cryptocurrencies by solving highly complex computational mathematic problems. While the mining process can be done using a decent computer, it is best to have a high-end, powerful, specialised chip. The solving process includes the verification of data blocks followed by the transactions getting added to the digital ledger, the blockchain. The cryptocurrency reward is not guaranteed, it is given to the computer that finds the solution to the complex math problem first. Cryptocurrency mining is a very expensive process and consumes power (electricity) that leads us to our next point – e-waste.
E-Waste due to cryptomining
Now that you’ve grasped the basics of what cryptocurrency and crypto mining is, let’s get into the detrimental side effects caused by it. As we’ve already mentioned that the whole mining process requires powerful hardware which means a vast amount of electricity is needed to run that hardware. This huge amount of electricity leaves a significant amount of carbon footprint. Carbon footprint means the amount of carbon dioxide released into the atmosphere due to whatever activity you are talking about - in this case cryptomining.
Alex de Vries, Data Scientist, and Christian Stoll, a researcher at MIT Center for Energy and Environmental Policy Research, as well as TUM Center for Energy Markets, has estimated 30,700 tonnes of e-waste is produced annually from bitcoin mining alone. According to the researchers, it averages around 272g per transaction, and an iPhone 13 weighs around 173g. The bitcoin transaction is producing more because of the high power consumption. As bitcoin mining and cryptocurrency become more popular, unfortunately, cryptocurrencies are going to turn into an environmental issue, as per the researchers. Crypto mining rigs need to be running 24/7 because if there is any break, it’ll make it even harder to earn the next coin. This forces the serious miners to buy more high-end computers and run them all together in order to get an edge over their competitors. According to the researchers, the high-end computers used to mine Bitcoin have an average lifespan of about 1.29 years only. This results in a production of a lot of e-waste which, according to the researchers, is ““comparable to the small IT and telecommunication equipment waste of a country like the Netherlands”. This category normally includes computers, printers, and mobile phones.
Energy Efficiency Efforts
Seeing how more power consumption is the main issue that translates into a carbon footprint, many miners have resorted to efficient processors. This is achieved by using specialized chips known as Application Specific Integrated Circuits (ASICs). These are chips tailored for a particular use, but the issue is that these are so unique that they cannot do tasks other than what they’re made for. In the mining world, it means they cannot be tasked to mine different types of currencies due to varying mining algorithms. Ultimately, they become useless and contribute to the e-waste. The good thing about these chips is that most of the equipment used to mine the cryptocurrency is made up of recyclable material such as aluminum. But the chips cannot be recycled.
Global Supply Chain Disruption
As the chips are not recyclable, the miners get rid of them and buy new ones. This constant and swift change of chips causes more harm by producing large amounts of e-waste and simultaneously causes turmoil in the global supply chain of other electrical devices such as smartphones, computers, etc. due to the lack of chips to manufacture them. Another issue is the scalpers setting up automatic bots to buy GPUs in bulk whenever they are back in stock. While the gamers are excited to get their hands on one of their latest GPU in hopes of building a high-end gaming PC, scalpers already get them using automatic bots. GPU processing is faster than the standard CPU processing and as we’ve already mentioned before, the one who “mines” first gets the currency. Sometimes, these miners want to get rid of their used GPUs, and knowing that the demand is high due to lack of stock, they sell at double the Manufacturer’s Suggested Retail Price (MSRP). This issue was at its peak during the launch of the new Nvidia RTX 3000s GPU series recently, although, the scalpers have reduced ever since. Currently, the PS5 suffers the same fate of lack of stock due to scalpers.
