Bitcoin’s recent bull runs have been highly celebrated by crypto enthusiasts all over the world. In recent data by Crypto.co, bitcoin just breached the $50K mark and recorded its newest all-time high. To date, there are already 18,630,837 total bitcoins that circulate in the market. With its total maximum of 21,000,000, we only have 2,369,163 left. Bitcoins are generated by bitcoin miners using hardware mining equipment.
Introduction to Bitcoin Mining
What is bitcoin mining? According to Investopedia, Bitcoin mining is the process of creating new bitcoins by solving a computational puzzle.
It is necessary to maintain the ledger of transactions upon which bitcoin is based. Nowadays, bitcoin miners use complex machinery for faster mining operations. Bitcoin mining has two stages.
- 1. Computers solve complex math problems on the bitcoin network to create new bitcoin.
- 2. Bitcoin miners solve computational math problems to secure the network and process every bitcoin transaction.
The role of bitcoin miners is very essential in the network since they help prevent the “double spending” problem. This is the very essence of why bitcoin was invented by Satoshi Nakamoto. Bitcoin miners are rewarded with bitcoin for their contribution to the network.
China has the biggest number of mining farms in the whole world. It accounts for more than 60% of the bitcoin network’s collective hash rate. The autonomous Xinjiang region generates 35.76% of the global total bitcoin hash rate. Other countries that have the largest bitcoin mining farms are Iceland, Georgia, Canada, United States, Russia, Switzerland, and Venezuela.
So, how much do bitcoin miners earn? In 2009, bitcoin miners got 50 BTC after mining one block. But in 2012, the first bitcoin halving happened. Bitcoin halving happens every four years. From 50 BTC, it was halved to 25 BTC. The next halving happened in 2016. From 25 BTC, bitcoin miners now only get 12.5 BTC. The latest halving happened on May 11, 2020. The amount of block reward that these miners get is now reduced to 6.25 BTC.
So, how long will it take for the remaining bitcoins to be mined? In a data by Buy Bitcoin Worldwide, 144 average blocks are mined every day. Each block has 6.25 BTC.
144 (average blocks mined per day)
x 6.25 BTC (block reward per block mined)
= 900 BTC (average BTC mined per day)
Based on this approximate computation, the remaining 2,369,163 BTC will be completed in more or less 2,632 days or 7 years. But the next bitcoin halving will be happening in 2024. This means the mining completion of the remaining bitcoin will take much longer than 7 years in actuality. But why do we have to concern ourselves about how long will the mining be completed? Here’s the catch. According to some experts, the mining of cryptocurrencies including bitcoin has a harmful effect on our environment. Hey, wait. How? Let’s take a look at the effects of bitcoin mining on our environment. Is it really that bad?
Bitcoin Mining: A Global Threat or Not?
There has been a debate among experts regarding the level of cryptocurrencies’ carbon footprint. Bitcoin mining is largely dependent on cheap energy sources. To mine one bitcoin, you will be needing 72,000 GW (or 72 Terawatts) of power. Most bitcoin mining farms are located in areas with cheap energy costs that include coal. According to a recent report by CNBC, the amount of carbon footprint produced by bitcoin mining every year is 36.95 megatons which are already equivalent to that of New Zealand. Although the cost of coal energy is 30% cheaper compared to renewable energy sources, the amount of carbon emission is four times higher. Just imagine the amount of carbon emission that bitcoin mining will add up to our already deteriorated atmosphere for the next ten or more years. With the large amount of energy needed to mine bitcoin, we would need a massive amount of coal to provide the energy needed.
This is contrary to an earlier report by the Digital Journal published on Nov. 25, 2019. In a conducted research supported by the Independent Research Fund Denmark reveals that the Bitcoin network consumed 31.3 Terawatt-hours of electricity and generated 17.3 megatons of carbon dioxide over one year. As further stated in the report, the environmental impact comes from the mining equipment, with minimal contributions from production and recycling. Also, the geographical location of the miners has the biggest impact. Meaning the volume of carbon emission can be reduced depending on the source of energy that will be used. It also stated that the relocation of miners to cooler climates will require less energy.
With the debate on the accurate carbon footprint by bitcoin mining is still ongoing, it needs further study to arrive at a conclusive report. Recently, there has been an increase in the number of bitcoin mining companies due to the high demand for Bitcoin as a result of its massive adoption. Ebang International, a leading manufacturer of high-performance Bitcoin mining machines, announced its plans to venture into bitcoin mining. Will blockchain, the underlying technology of bitcoin, provide the antidote soon? Who knows one day it will. Or maybe, bitcoin mining carbon emission will soon stop once the mining process of the remaining bitcoin is already completed.