There has been a lot fuzz about the carbon footprint and tech-waste of cryptomining lately. An often cited website is the digiconomist website https://digiconomist.net/bitcoin-energy-consumption/.
There you can read, that the same USD value of bitcoin mined would produce ten times the amount of greenhouse gases vs. the same USD value mined in physical gold.
Knowing that energy is also the biggest cost contributor in goldmining (just look at all those dozers from Goldrush's Parker) I just had the feeling that if that would be true it would be impossible to do any profitable BTC mining.
So time for solarwarrior to dig a little bit into the vast spaces of the internet and do some calculations.
First:
What crypto to compare to what other asset / service?
Bitcoin and gold are probably the best pares to start with as both could be used as means for payment but only for very high fiat dollar amounts where cost of transaction does not really matter.
But for sure more so they are both used as a store of value and inflation / crisis protection.
So lets find out what the carbon footprint of goldmining is:
Lets go to the website of the worlds largest gold mining corporation Barrick and lets have a look into their ESG report:
https://www.barrick.com/English/sustainability/environment/default.aspx
We can read, that in 2020 their scope 1 emissions are 6.04 million metric tons of CO2e and their scope 2 emissions are 1.3 million metric tons of CO2e, in sum 7.35 million metric tons.
Their gold production in 2020 was 4.76 million troy ounzes.
This equals 1.54 metric tons of CO2e per each troy ounze produced.
You wonder why their emissions are so high? The report says: "The bulk of the energy we consume is from thermal generators burning diesel and heavy fuel oil"
So now lets have a look on bitcoin mining:
Lets take the Bitmain Antminer S17E with 64 TH/s.
At current BTC hash rate one S17E will yield 0.01068 BTC / month or 0.128 BTC per year.
So we need 7.8 units of S17Es to mine one BTC after one year (given current hashrate and difficulty)
One S17E will consume about 2,073 kWh per month or 27,950 kWh / year.
Times 7.8 miners = 218,000 kWh.
The eia says that the carbon footprint of of one kWh in the US the year 2020 was 0.85 pounds of CO2e.
https://www.eia.gov/tools/faqs/faq.php?id=74&t=11
0.85 pounds equals 0.3855 KG.
218,000 * 0.3855 KG = 84 metric tons of CO2e.
So now we have to equal the dollar values of gold and BTC.
BTC is priced @ 56,364 USD at the time of writing
gold is priced @ 1,765.72 USD per ounze at the time of writing.
So 1 BTC equals 31.92 ounzes of gold in regards to same USD value.
Now we multiply the 1.54 metric tons CO2e times 31.92 = and we end up with 49 tons of CO2e vs. the 84 tons of mining one BTC.
So yes, in regards to CO2 emissions BTC seems to be worse than physical gold by roughly 70%.
You ask about all the emission producing all those dozers and other heavy equipment used mining gold? Yes, you are right, but you also have to consider the chips used for BTC mining. (this is called scope 3 emissions)
I assume this could have similar effects, so we do not put this into consideration at the moment, but I will probably try to give you an update about this much more complex problem in a later post.
But there is one thing we definitely should not leave out and this is the ground and vegetation destroyed by open pit gold mining.
While this already bad @ the big mining behemoths
it gets horrible with the small illegal artisan gold miners.
https://amazonaid.org/threats-to-the-amazon/gold-mining/
So I guess I will make a second post looking @ LUC (land use change) - how gold mining is destroying the landscape, vegetation and the subsequent carbon footprint of that act.