Bitcoin mining is the process of extracting Bitcoin from the blockchain. In theory, it’s a concept that is hard to grasp, but the general outline is that Bitcoins (and other cryptocurrencies) are mined by computers making complicated calculations. The problem is, these computers and devices uses a huge amount of energy when solving the algorithms, even just to mine small fractions of Bitcoin. So, we have a problem don’t we. Expensive machines all working together, creating high energy bills, a lot of heat and a big carbon footprint, in return for a small amount of Bitcoin. What’s more, further energy is used in ensuring mining operations are kept cool and of course, land is used to create these massive mining warehouses. It’s a curse to the environment, but there’s something else we should consider too - the production of FIAT currency has an environmental cost too.Before we look into the problems surrounding the production or ‘minting’ of FIAT currency, we should consider that going forward, Bitcoin mining will become greener and more environmentally friendly, it has to because it’s in the best interests of the miners. According to Crypto Insider:
“Bitcoin miners want to remain profitable. It’s their business, after all. Though much of the focus in the ‘Bitcoin energy consumption scandal’ falls on how much energy is being used, there’s very little emphasis on where the energy comes from. This is actually the most important factor in the debate. Global energy consumption is on the rise, and so are fossil fuel prices.”
“Bitcoin miners have been quick to identify this trend, and they are flocking to places like Iceland, Oregon, Washington State and Canada to take advantage of cheap power (that happens to be green).”
“Moving forward, it’s clear that bitcoin miners have the power to drive innovation in the green energy sector, but the challenge will be convincing the two industries to work together. Though bitcoin is relatively new, it presents an excellent opportunity for energy producers to add a new source of revenue to their projects or even fund new technologies that could pay off down the line. Bitcoin certainly isn’t the evil ‘ocean boiling’ tech that it is made out to be, in fact, it may end up being just the opposite.”
You can see the full article for yourself, here. So, what about FIAT?
For this, we are turning to The Royal Mint, best known for the production of the Pound Sterling and currencies for around 60 countries across the world. This makes The Royal Mint the biggest currency manufacturer in the world.
The Royal Mint have released a concise version of their 2016 - 2017 annual report, within which a huge bulk has been devoted to highlighting the Mint’s environmental performance throughout the year. Of course, The Royal Mint have a very clean environmental approach, but what I am trying to highlight here is that the production of all currency has an impact on the environment, not just cryptocurrency. The problem isn’t Bitcoin, the problem sadly is humans nature and desire to produce things, at the expense of the planet and our natural resources. You can see the Sustainability Report section of The Royal Mint Annual Report here. For the relevant section, skip to page 30.As stated, we’re not calling out The Royal Mint here for being environmentally damaging, in fact, they are doing a lot to reduce their impact but my point still rings true, the production of all money is harmful, it’s not just Bitcoin.According to the report:
“The Royal Mint, as part of its commitment to maintaining its ISO 14001 (2004) environmental management standard and the migration to ISO 14001 (2015) standard accreditation, reviews its significant environmental aspects and sets targets accordingly.”
These targets include:
“Reducing water consumption.”
“Maintaining or improving on energy consumption across site.”
“Monitoring waste production across site, ensuring steps are taken so that waste is not disposed of via landfill.”
Water ConsumptionWater consumption is a huge part of The Royal Mint’s manufacture process. Between 2016 - 2017, the Mint used around 25.5M3 of water per tonne of circulating coins, this supply of water cost around £129,000.00. Whilst this is quite a bit of water, it’s nothing compared to the figures in 2012 - 2013, when 40.9M3 of water per tonne of circulating coins was used, costing around £223,000.00. The Royal Mint are making changes and becoming more efficient, therefore, Bitcoin mining can take the same approach too. Greenhouse Gas Emissions/Electricity UseFor many Bitcoin haters, this is the big one. According to the graphs in the report, in 2016 - 2017, The Royal Mint produced around 23,300 tones of Carbon Dioxide, this is up slightly from the years 2012 - 2013, but is allegedly as a result of the production of the new pound coin that now circulates in the United Kingdom. Electricity consumption stands at a cost of around £4,627,000.00, with an output of 48 GW/h (Gigawatt Hours) in 2016 - 2017, up from 37 GW/h as recorded in 2012 - 2013. Waste RecyclingThis is less relevant to Bitcoin mining as little waste is produced, however it’s handy to point out that The Royal Mint have increased the amount of waste they recycle (a good thing) to 86% of all waste in 2016 - 2017, compared to just 68% of all waste in 2012 - 2013. Other ConsiderationsFIAT currencies, such as those produced by The Royal Mint are made from finite materials, metals and plastics that aren’t exactly carbon neutral in their production. Overall, Bitcoin mining hurts the planet, but so does FIAT tooLet’s remember just how long FIAT currency has been around, yet it’s still an earth-exhausting activity. Like I have said, it’s not a bad thing and companies like The Royal Mint are trying to make a difference. They will get better, cleaner, greener and more efficient. But so will Bitcoin and cryptocurrency mining. It’s a new industry, one that is growing at a rapid rate and one that doesn’t deserve stigma it currently faces. Bitcoin mining will clean up its act and one day Bitcoin will become cleaner than any FIAT currency, way before FIAT manages to do the same.