An Order-of-Magnitude Estimate of the Relative Sustainability of the Bitcoin Network

Posted on June 5, 2014 by hassmccook — Leave a comment

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There has been a lot of uncertainty surrounding the sustainability of the Bitcoin network, with this fascinating nascent technology facing several unsubstantiated claims by uninformed individuals that Bitcoin is highly unsustainable from a social, economic and environmental point of view. This paper aims to disprove or support these claims about the sustainability of the Bitcoin network, and provide an order-of-magnitude comparison of the relative sustainability of Bitcoin when compared with the incumbent banking industry, the gold production industry, and the process of printing and minting of physical currency.

Widely available public information strongly refutes claims that Bitcoin is unsustainable, and shows that the social, environmental and economic impacts are a minuscule fraction of the impacts that the legacy wealth and monetary systems have on our society and environment.

The results of the research are summarised in the tables below.

Comparison of Annual Economic Costs

	Gross Yearly Cost
Gold Mining	USD$105 billion
Gold Recycling	USD$40 billion
Paper Currency & Minting	USD$28 billion
Banking System Electricity Use	USD$63.8 billion
Bitcoin Mining	USD$0.66 billion

Comparison of Annual Environmental Costs

	Energy Used (GJ)	Tonnes CO₂Produced	Emission Trend
Gold Mining	475 million	54 million	Increasing
Gold Recycling	25 million	4 million	Decreasing
Paper Currency & Minting	39.6 million	6.7 million	Increasing
Banking System	2340 million	390 million	Increasing
Bitcoin Mining	3.3 million	0.55 million	Decreasing

Comparison of Annual Socioeconomic Costs

	Gold	Fiat Currency	Bitcoin
Worker Deaths	Over 50,000 historically recorded & Over 100 per year	0	0
Corruption	USD$600m	USD$1.60 trillion	Negligible
Money Laundering		USD$2.65 trillion
Black Markets		USD$1.80 trillion