In a recent interview with New York Times, Bill Gates said that Bitcoin is utilizing more electrical energy for each transaction than any other operation known to humankind, which is not good for the climate. Similarly, according to the estimations of Alex De Varies, a data scientist at the Dutch central bank, for each transaction of Bitcoin, approximately 300 kilograms of carbon dioxide (CO2) are needed, which is roughly equal to the traces of carbon produced as a result of nearly 750,000 Visa swipes.
The reason is that, for all cryptocurrencies, including BTC, the documentation of each transaction is required to ensure transparency. This documented data is saved in the form of blocks for the public to make it safe from tampering. As a result of daily Bitcoin transactions, more and more storage space and blocks are needed. These blocks have specific codes, which are also called blockchain data. These codes are continuously running on the special mining hardware called the rigs. These mining rigs are the elements that consume a huge amount of electrical energy. The mining rigs’ annual energy consumption is 78.5 Terra watt-hours, which are approximately the same as the nations like Finland, China, and Austria.
The mining and transaction of a single Bitcoin approximately use the electrical energy of 707.6 kilowatt-hours, which are roughly equivalent to the energy consumption by a single house in the USA over 24 days.
Crypto mining forms are mostly present in China, where the chief source of power is a fossil fuel like coal. As digital assets’ demand has increased globally, the Chinese energy utilization factor has soared up to 10 times since 2017. This is why China is counted among the top CO2 emitting countries of the world and ultimately pushes the world to climate change.
Mongolia, a sovereign state of China, has declared to shut down all the crypto mining firms in the region to overcome the energy crisis in the future. According to recent reports, Mongolia failed to reach the energy-saving targets due to the presence of many crypto mining firms.