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Blockchain technology is increasing in popularity across industries but, in its current iteration, triggers significant environmental, social, and governance (
ESG) considerations. As the financial services sector simultaneously invests in blockchain technology and commits to ESG-sensitive policies and portfolios, how are the “E” and “S” impacts of blockchain and its applications to be weighed?
Blockchain, the digital infrastructure popularized by the Bitcoin cryptocurrency and now expanding into data validation and transfer uses in fields from supply chains to healthcare to governance, is a digital distributed ledger system that records and verifies information in real-time, without reliance on a central authority to verify the data. For effective data validation in the absence of a centralized monitor, a “block” of data may only be added to an existing “chain” when a disperse network of individual users
How Bitcoin trade is hurting climate change mitigation
Summary
To keep the Bitcoin blockchain up and constantly running, it requires enormous computing power, consuming huge amounts of hydroelectricity in the process.
Global Bitcoin mining and trade consumes 121.36 terawatt-hours (tWh) of electric energy per year, which is more than 15 times the electric power consumed by Kenya annually (7.86 tWh).
Thursday April 22 2021
Summary
To keep the Bitcoin blockchain up and constantly running, it requires enormous computing power, consuming huge amounts of hydroelectricity in the process.
Global Bitcoin mining and trade consumes 121.36 terawatt-hours (tWh) of electric energy per year, which is more than 15 times the electric power consumed by Kenya annually (7.86 tWh).
Visualizing the Power Consumption of Bitcoin Mining
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Visualizing the Power Consumption of Bitcoin Mining
Cryptocurrencies have been some of the most talked-about assets in recent months, with bitcoin and ether prices reaching record highs. These gains were driven by a flurry of announcements, including increased adoption by businesses and institutions.
Cryptocurrencies have been some of the most talked-about assets in recent months, with bitcoin and ether prices reaching record highs. These gains were driven by a flurry of announcements, including increased adoption by businesses and institutions.
Lesser known, however, is just how much electricity is required to power the Bitcoin network. To put this into perspective, we’ve used data from the University of Cambridge’s Bitcoin Electricity Consumption Index (CBECI) to compare Bitcoin’s power consumption with a variety of countries and companies.
Why Does Bitcoin Mining Require So Much Power?
When people mine bitcoins, what they’re really doing is updating the ledger of Bitcoin transactions, also known as the blockchain. This requires them to solve numerical puzzles which have a 64-digit hexadecimal solution known as a
China s electricity-guzzling Bitcoin mines, which power nearly 80 per cent of the world s cryptocurrency trade, could undermine the country s climate goals, according to a study published on Tuesday in the scientific journal Nature.
While the terminology cunjures up images of digging up precious minerals from a hole in the ground, mines from which Bitcoins are extracted are in fact sites full of microprocessors running to perform mathematical calculations.
These computers, which are the source of Bitcoins, consume huge amounts of electricity, some of it originating in one of more than a thousand coal-fired power plants across China.
According to the Nature study, if left unchecked, China s Bitcoin mines will produce 130.50 million metric tons of carbon dioxide emissions by 2024, nearly equivalent to the total annual greenhouse gas emissions of Italy or Saudi Arabia.