The use of Bitcoin leads to about 22 megatonnes in CO2 emissions annually, comparable to the total emissions of cities such as Hamburg or Las Vegas, according to the most detailed analysis to date of the cryptocurrency's carbon footprint.
Researchers at the Technical University of Munich (TUM) in Germany analysed such data as the IPO filings of hardware manufacturers and the IP addresses of Bitcoin "miners."
The study, published in the journal Joule, was able to localise 68 per cent of the Bitcoin network computing power in Asian countries, 17 per cent in European countries, and 15 per cent in North America.
Although Bitcoin is a virtual currency, the energy consumption associated with its use is very real.
For a Bitcoin transfer to be executed and validated, a mathematical puzzle must be solved by an arbitrary computer in the global Bitcoin network.
The network, which anyone can join, rewards the puzzle solvers in Bitcoin.
The computing capacity used in this process — known as Bitcoin mining — has increased rapidly in recent years. Statistics show that it quadrupled in 2018 alone.
The Bitcoin boom raises the question of whether the cryptocurrency is imposing an additional burden on the climate. Several studies have attempted to quantify the CO2 emissions caused by Bitcoin mining.
"These studies are based on a number of approximations, however," said Christian Stoll, who conducts research at TUM and the Massachusetts Institute of Technology (MIT) in the US.
Researchers began by calculating the power consumption of the network. This depends primarily on the hardware.
"Today special systems are used, known as ASIC-based miners," siad Stoll.
To investigate the orders of magnitude involved, the team used statistics released by a public pool of different miners showing the computing power of its members.
The researchers determined the annual electricity consumption by Bitcoin, as of November 2018, to be about 46 TeraWatt Hour (TWh).
The team found that the Bitcoin system has a carbon footprint of between 22 and 22.9 megatonnes per year.
That is comparable to the footprint of such cities as Hamburg, Vienna or Las Vegas, researchers said.
"Naturally there are bigger factors contributing to climate change. However, the carbon footprint is big enough to make it worth discussing the possibility of regulating cryptocurrency mining in regions where power generation is especially carbon-intensive," said Stoll.
"To improve the ecological balance, one possibility might be to link more mining farms to additional renewable generating capacity," he said.