In May 2017 he published the article ‘Sustainability of bitcoin and blockchains’ in the journal Current Opinion in Environmental Sustainability. The article was an elaboration of his presentation at the Symposium on Learning and Innovation in Resilience Systems, end of March 2017 at the Open Universiteit in Heerlen, being one of the organizers.

Can the system behind the bitcoin be sustainable?

The article deals with the fundamental question whether the system behind the bitcoin can be sustainable, taking into account the amount of energy needed for bitcoin mining. Bitcoin mining implies creating new bitcoins by means of computers when processing transactions using blockchain technology. This is energy-intensive because the underlying proof-of-work concept requires a lot of computing power, in which the parties involved try to perform the computations as quickly as possible using dedicated hardware. This offers a secure system with all the advantages of blockchain technology, but it is energy demanding.

Looking at the rise of blockchain technology and the highly topical and relevant social debate on sustainability, Vranken investigated the developments in hardware and software for bitcoin mining and what that means for energy consumption. In the article he outlines a number of alternatives which lead to less energy consumption and thus smaller burden on the environment.

An initial estimate of energy consumption

Vranken estimated the worldwide energy consumption for bitcoin mining to be between 100 and 500 MW. He compared this energy consumption with the energy consumed by other sectors of the money industry, such as printing and storing cash, the extraction and reuse of gold and the banking industry as a whole. He indicated that the energy consumption associated with bitcoin mining was still relatively low. His advice was: "keep an eye on energy consumption in the design of blockchain applications and certainly also look at design alternatives".

Estimation bitcoin mining energy consumption adjusted

In the past months the popularity of bitcoin has increased considerably and we now can speak of a hype. Vranken states that the energy consumption for bitcoin mining has become a serious problem. "My estimate early this year was that the energy consumption was not too bad. My recent calculations show that the energy consumption now is more than five times higher. This means that the electricity consumption for bitcoin mining is just as high as that of a small country, or about 0.1% of the worldwide electricity consumption. This growth is likely to continue. There is a good chance that the hype surrounding bitcoin turns out to be a bubble. But even if this splashes, this will not mean the end of virtual currencies based on blockchain technology. It remains important to consider how blockchain technology and energy consumption are interlinked."

Around the world

The article of Vranken was first picked up by the Canadian journalist Peter Fairley. At the end of September this article was published online in the authoritative IEEE spectrum. Other media followed, also inspired by the hype surrounding the price development of bitcoin, including the techno magazine Wired UK, BBC Newshour Extra, Deutsche Welle and the Danish Broadcast Corporation. An article in The Washington Post will follow.

Want to know more?

The Universiteit van Nederland will stream a lecture by Harald Vranken early 2018 in which he explains the energy consumption of bitcoin mining.