Bitcoin Has An E-Waste Problem, But It’s Not As Bad As You Might Think

But while the research paper and the associated reporting don’t make for comfortable reading if you’re a Bitcoin champion, they arguably frame the cryptocurrency’s environmental impact in an overly negative light.

In particular, they 1) fail to put Bitcoin’s impact in the context of the impacts of other activities; 2) seem to assume that Bitcoin is inherently worthless or meaningless, so any impact is thereby unjustified; and 3) underplay the extent to which Bitcoin’s impact may be reduced over time.

Thirty Metric Kilotons Going On 64.4

Summarising their findings in the paper’s conclusion, researchers Alex de Vries (aka Digiconomist) and Christian Stoll note that the average Bitcoin mining unit becomes unprofitable in approx. 1.29 years, after which they assume that miners will ditch it for a newer, more powerful alternative. Based on this calculation, and based on taking into account Bitcoin’s hashrate and the weight of devices per TH/s, they arrived at the figure of 30.7 metric kilotons of electronic waste per year.

“This number is comparable to the amount of small IT and telecommunication equipment waste produced by a country like the Netherlands (30 metric kilotons in 2018; Baldé et al., 2020) and adds another layer to the previously identified environmental sustainability challenges faced by PoW-based digital currencies,” the authors write.

The study also took the total number of Bitcoin transactions in 2020 (112.5 million) to arrive at the average of 272 grams of waste per transaction. It also noted that, if the price of bitcoin remained at the $64,000 level (as it was in April of this year), its annual e-waste total would rise closer to 64.4 metric kilotons. And needless to say, the more bitcoin rose in price, the more equipment (you’d assume) miners would throw away.

Bitcoin Produces Lots of E-Waste… 0.056% of the World’s Total E-waste in 2019

While the study used plenty of data, it was unsurprising that numerous media outlets — the Daily Mail and Business Insider (in addition to the Guardian)– led with the comparison that one Bitcoin transaction is (on average) equivalent to throwing away two iPhones, as if two iPhones actually are thrown away every time you send some BTC to your wallet. Of course, this is an entirely misleading and sensationalist headline, since the e-waste is only equivalent to two iPhones in terms of weight, and not in terms of components and materials.

There are other things that can be said against the study and reporting of it, including the fact that the study makes a number of assumptions that may have ultimately increased its figure of 30 kilotons. For example, it assumes that ASIC mining units are not reused or resold on to other miners, which is certainly not the case.

Source: Twitter

CoinMetrics calculate that the Antminer S9 unit — which the study classifies as obsolete/e-waste — accounts for around 30% of the current Bitcoin hashrate.

Source: Twitter

However, even if we point out that some of the paper’s calculations are potentially overstated, this still doesn’t change the fact Bitcoin inevitably produces a large amount of e-waste per year, whether this is 30 kilotons, 20 or 10. That said, it’s still unfair and inaccurate to conclude that Bitcoin is ‘bad,’ ‘wasteful’ or ‘destructive’ because of this.

Or at least, it would be unfair and inaccurate to single out Bitcoin, while also failing to highlight other wasteful activities. In this respect, it’s notable that the paper doesn’t compare the cryptocurrency’s annual e-waste tally to the totals for other activities. How much e-waste does taking selfies produce per year? What about upgrading to a new TV just to get a slightly better picture quality?

According to the Global E-waste Monitor 2020, the world generated some 53.6 million metric tons of e-waste in 2019. This is equal to 53,600 kilotons, meaning that Bitcoin accounts for a whopping (warning: sarcasm) 0.056% of the world’s overall e-waste production. It’s killing the planet!

In this author’s opinion, the reasons why such comparisons aren’t made is that the authors of the study (and the outlets reporting it) automatically assume that Bitcoin is intrinsically worthless and meaningless, and that any amount of e-waste it produces is unquestionably something that has to be stamped out (and has to be used as a justification for opposing the cryptocurrency).

However, not everyone would agree that Bitcoin offers nothing to the world or to the people within it. While everyone has no doubt heard of the libertarian/anti-government argument in favor of Bitcoin, the cryptocurrency has already provided genuine day-to-day help to people living in Nigeria, Venezuela, and Turkey, among other unstable countries. Surely such people would be willing to accept some degree of e-waste in return for having access to a stronger currency than the weakening fiat currencies they usually have to use.

That said, e-waste is something the world would benefit from reducing. And while Bitcoin is far away from being the chief culprit of the globe’s current E-waste troubles, it could still arguably play its part and set an example.

To be fair, the authors of the study note two potential developments that could help Bitcoin lower its E-waste footprint. The first is that awareness of E-waste could be increased such that more miners recycle their units: “generic components such as metal casings and aluminum heatsinks account for most of a typical ASIC miner‘s weight, [so] it should be possible to recycle or even reuse parts after dismantling.”

The second is that Bitcoin could, like Ethereum, eventually transition to a proof-of-stake consensus mechanism, which uses much less energy (and hence produces less E-waste) that its current proof-of-work mechanism. But while this would make a big difference, proponents of PoW argue that it’s much more secure than PoS, which can tend towards centralization. In other words, don’t expect Bitcoin to transition to Bitcoin 2.0 anytime soon, not that its E-waste problem is quite as bad as some would have you think.