Quantification of energy and carbon costs for mining cryptocurrencies

Abstract

There are now hundreds of cryptocurrencies in existence and the technological backbone of many of these currencies is blockchain—a digital ledger of transactions. The competitive process of adding blocks to the chain is computation-intensive and requires large energy input. Here we demonstrate a methodology for calculating the minimum power requirements of several cryptocurrency networks and the energy consumed to produce one US dollar’s (US$) worth of digital assets. From 1 January 2016 to 30 June 2018, we estimate that mining Bitcoin, Ethereum, Litecoin and Monero consumed an average of 17, 7, 7 and 14 MJ to generate one US$, respectively. Comparatively, conventional mining of aluminium, copper, gold, platinum and rare earth oxides consumed 122, 4, 5, 7 and 9 MJ to generate one US$, respectively, indicating that (with the exception of aluminium) cryptomining consumed more energy than mineral mining to produce an equivalent market value. While the market prices of the coins are quite volatile, the network hashrates for three of the four cryptocurrencies have trended consistently upward, suggesting that energy requirements will continue to increase. During this period, we estimate mining for all 4 cryptocurrencies was responsible for 3–15 million tonnes of CO2 emissions. Cryptocurrency mining requires extensive energy consumption for computers to verify the blockchain and generate new currency. This analysis compares several cryptocurrencies and metals in terms of the amount of energy needed to create one US dollar of value, as well as the carbon emissions that may be directly attributable to cryptocurrency mining.