What are the bitcoin miners

Digital currencies like Bitcoin are created in specialized computer farms; they are occasionally called mines or mines in the scene, in which the operators mine for the virtual coins. This metaphor obviously contains more truth than expected, because operating the hardware consumes as much energy as mines for gold, platinum, copper or rare earth metals. In the 30 months from the beginning of 2016 to mid-2018, Bitcoin miners had to spend an average of 17 megajoules in the form of electricity to create one US dollar of new value, shows a study in Nature Sustainability - Mine operators used five megajoules per dollar for gold, the other metals were between four and nine. Only aluminum surpassed virtual money: To extract the light metal in an electricity-intensive process, 122 megajoules of energy per dollar are required.

The Bitcoin network uses as much electricity in six months as Denmark does in a year

Experts have long been concerned about the enormous energy consumption of digital currencies. Max Krause from the Oak Ridge Institute in Cincinnati, lead author of the current study, also suspects that the Bitcoin network alone consumed as much electricity in the first half of this year as Denmark did in 2015, i.e. more than 30 terawatt hours; in the second half of the year, according to his study, digital miners are likely to use significantly more electricity again. The website watchers Digiconomist.net in turn, estimate that by the end of the year it could be at least 73 terawatt hours, more electricity than Austria's needs and around a ninth of the consumption in Germany.

The fact that the two calculations deliver comparable values ​​speaks for their reliability, because they follow different methods. The operators of the website derive their estimated value from the operating costs of the Bitcoin miners, but Krause extrapolates the energy requirements of the hardware and leaves out the necessary cooling of the chips. So his numbers are more of a lower limit.

Bitcoins are generated and managed in a decentralized network in which the individual computers compete to solve cryptographic tasks: Whoever finishes first, is allocated a new block of 12.5 coins, which is currently worth around 81,000 dollars. The competitive situation drives up the consumption of energy and heats the market for ever faster hardware; But it also ensures that the coins are authenticated without central authority and thus have a recognized value.

According to Digiconomist.net, the network of Bitcoin miners is currently making a billion dollars a year in profits with a turnover of just under 4.5 billion dollars. Of this, 60 percent goes on electricity bills, a further 17 percent for hardware replacement and other costs. The course of the coins has made extreme jumps. It has risen from $ 430 in 2016 to a peak of $ 19,400 in December 2017 and then dropped back to a good $ 6,400. Compared to that, the price fluctuations of the real metals are insignificant.

Electricity consumption also results in large greenhouse gas emissions. Since many of the Bitcoin mines are located in China, they use electricity from coal-fired power plants. Max Krause has calculated that this means emissions that are four times as high as if the computers were in Canada. His study comes to up to 13 million tons of CO₂ that were released into the atmosphere for the Bitcoin network alone within the examined 30 months. Digiconomist.net expects 35 million tons for 2018 alone.

The authors of a comment in Nature Climate Change from the end of October this year even speak of 69 million tons of CO₂ emissions for 2017. By way of comparison: in Germany around 800 million tons of carbon dioxide were emitted in the same year. It is not only about mining the virtual coins, but also about trading and speculating with them. The team around Camilo Mora from the University of Hawaii warns that Bitcoin could destroy all attempts to cope with the climate crisis. If growth continues as before, so much greenhouse gas will be emitted in eleven to 22 years because of electricity consumption that the two-degree limit for global warming can no longer be met.

To do this, however, the digital currency would have to arrive as a means of payment in everyday life. For every transaction, the calculation effort required is similar to that required for mining new coins. That is why, according to Digiconomist.net, a transfer with Bitcoin consumes more electricity than 400,000 credit card payments. Other cryptocurrencies such as Ethereum and Litecoin use energy more sparingly. Currently, however, Bitcoin represents more than half of the $ 214 billion wealth that is in digital money.