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Cryptocurrency E-Waste
Bitcoin mining has also contributed to higher amounts in electronic waste, as it has become an increasingly popular form of currency in global trade. According to Alex de Vriews and Christian Stoll, the average bitcoin transaction yields 272 grams of electronic waste and has generated approximately 112.5 million grams of waste in 2020 alone. Other estimates indicate that the Bitcoin network discards as much “small IT and telecommunication equipment waste produced by a country like the Netherlands,” totalling to 30.7 metric kilotons every year. Furthermore, the rate at which Bitcoin disposes of its waste exceeds that of major financial organizations such as VISA, which produces 40 grams of waste for every 100,000 transactions.

A major point of concern is the rapid turnover of technology in the Bitcoin industry which results in such high levels of e-waste. This can be attributed to the proof-of-work principle Bitcoin employs where miners receive currency as a reward for being the first to decode the hashes that encode its blockchain. As such, miners are encouraged to compete with one another to decode the hash first. However, computing these hashes requires massive computing power which, in effect, drives miners to obtain rigs with the highest processing power possible. In an attempt to achieve this, miners increase the processing power in their rigs by purchasing more advanced computer chips.

It should be noted that according to Koomey’s Law, efficiency in computer chips doubles every 1.5 years, meaning that miners are incentivized to purchase new chips to keep up with competing miners even though the older chips are still functional. In some cases, miners even discard their chips earlier than this timeframe for the sake of profitability. However, this leads to a significant build up in waste, as outdated ASIC computer chips cannot be reused or repurposed. To further explain, most of the computer chips miners currently use are ASIC chips, whose sole function is to mine bitcoin, rendering them useless for other cryptocurrencies or operate in any other piece of technology. Therefore, outdated ASIC chips can only be disposed of since they are unable to be repurposed.

Bitcoin’s e-waste problem is further exacerbated by the fact that many countries and corporations lack recycling programs for ASIC chips. Developing a recycling infrastructure for bitcoin mining may prove to be beneficial, though, as the aluminum heatsinks and metal casings in ASIC chips can be recycled into new technology. Much of this responsibility falls onto Bitmain, the leading manufacturer of Bitcoin, which currently lacks the infrastructure to recycle waste from bitcoin mining. Without such programs, much of bitcoin waste ends up in landfills along with 83.6 % of the global total of e-waste.

Many argue for relinquishing the proof-of-work model altogether in favour of the proof-of-stake one. This model selects one miner to validate the transactions in the blockchain, rather than have all miners competing for it. With no competition, the processing speed of miners’ rigs would not matter. Any device could be used for validating the blockchain, so there would be no incentive to use single-use ASIC chips or continually purchase and dispose of new ones.