Cryptocurrency’s massive environmental impact will continue despite the value of coins like Bitcoin tumbling, an expert claims.
Research by Alex de Vries, a data scientist at the Dutch central bank and a cryptocurrency sustainability analyst, shows that the energy, and therefore fossil fuels, required to mine coins will not drop suddenly because miners will still seek a return on their investment in expensive computer equipment and power generation.
He told The Guardian: “Unless Bitcoin collapses further, there’s no reason to expect a decrease in environmental impact.”
The computing power required to support Bitcoin’s underlying network now requires nearly as much energy as the entire country of Argentina, leading to criticism about its environmental footprint.
Analysis by the University of Cambridge suggests the Bitcoin network uses more than 121 terawatt-hours (TWh) annually, which would rank it in the top 30 electricity consumers worldwide if it were a country.
The mining process required to generate new units of the cryptocurrency involves solving complex but arbitrary mathematical equations, which requires vast amounts of computer processing power.
Bitcoin has managed to bounce back after crashing to an 18-month price low over the weekend.
The cryptocurrency was trading at around $30,000 on Wednesday, marking a 56 per cent drop from its all-time high last November, while other leading cryptocurrencies are also way down from their record highs.
The downturn has seen more than $1.5 trillion wiped from the market and led to warnings from analysts that another “crypto winter” similar to 2018 may be underway.