Thread by @TRF_Stories

By now you've probably heard that #Bitcoin mining is bad for the environment. @ElonMusk even Tweeted about it yesterday 🪙.

But why does mining use so much energy? And how big is the impact anyway? 🧵

Before we get started, some housekeeping:

1⃣ #Bitcoin = A #cryptocurrency that can be used in transactions or as a store of value
2⃣ Blockchain = A decentralised database that stores information on transactions
3⃣ Blocks = A group of transactions

Got it? Let’s move on 🏃‍♀️.

Bitcoin mining is energy-intensive ⚡️ because of a process called “proof of work.”

Since blockchains are decentralised, they’re managed by a global network of ‘miners’ who record and verify blocks of transactions for the whole network.

In return for this work, miners are rewarded with newly minted Bitcoins 💰.

Before a miner can add a new block 🧊, they have to play a kind of lottery.

Each block comes with a mystery number, and the first miner to guess the right number gets to ‘mine the block’ and obtain the reward 🏅 .

The only way of doing this is trial and error, so mining computers 🖥️ are iterating through massive numbers of guesses every second. It’s all all of these computations that use a ton of energy.

But how much energy ⚡️ are we talking about?

There are lots of cryptocurrencies now, and Bitcoin’s alone currently accounts for about 0.5% of global energy consumption 🔌.

That’s more than Sweden 🇸🇪, but less energy than is used by household electronics in America 🇺🇸 each year.

We know the energy usage of Bitcoin mining, but to understand its environmental impact we need to know its carbon footprint 🌐.

Figuring that out is complicated.

news.trust.org/item/202105130…

Energy consumption alone doesn’t give you a carbon footprint. Each power source emits a different amount of carbon to produce the same amount of energy, that’s its ‘carbon intensity’.

To find the carbon footprint, we need to know where miners are & what they’re plugged into 🔌.

The available data are incomplete and imprecise, as the exact number of miners and their location around the world is unknown 📍.

The most recent research on this comes from a University of Cambridge survey done in Spring 2020.

They found that while over 75% of miners used renewables as a part of their energy mix ⚡️, nearly 66% of their energy came from fossil fuels.

They also found that most miners were located in these 10 countries 🌏.

China 🇨🇳 leads in Bitcoin mining by a large margin.

While some provinces like Sichuan and Yunnan use the surplus hydro power, mining in Inner Mongolia and Xinjiang uses some of the surplus of coal production there ⚡️.

Some analysts worry that crypto mining in China threatens the country’s climate targets, and the province of Inner Mongolia has recently banned mining to rein in its energy consumption ❌.

In the US 🇺🇸, small local communities are even taking a stand against the environmental cost of #cryptocurrency mining 🛑.
news.trust.org/item/202105130…

So what does this mean for the future of cryptocurrencies? And is there a green alternative?

Watch our latest explainer to find out more: