One bitcoin transaction creates the same amount of electronic waste as throwing away two iPhones, economists have found, because of the short lifespan of "mining" computers.
The bitcoin network annually generates 30.7 metric kilotons of waste as mining equipment is thrown away, according to a study by economists Alex de Vries and Christian Stoll.
There were 112.5 million transactions in 2020, so that "equates to at least 272 g of e-waste per bitcoin transaction," they said in a paper published this week.
Critics have long focused on bitcoin's enormous electricity consumption, but De Vries and Stoll said people have "thus far ignored that bitcoin miners cycle through a growing amount of short-lived hardware."
Bitcoin mining is the process whereby computers solve complex puzzles to verify transactions and are rewarded with new coins. It is very energy intensive, and most miners use specialist computer chips known as ASICs.
The computers are competing against each other, meaning miners are driven to use the newest and most powerful devices. And because mining computers often only serve one purpose, they're quickly rendered obsolete.
"The lifespan of bitcoin mining devices remains limited to just 1.29 years," De Vries and Stoll wrote.
They said the 30.7 kilotons of waste bitcoin produces each year is comparable to the amount of small IT and telecommunication equipment waste produced by a country like the Netherlands.
The ethereum network is trying to tackle the problem of waste from crypto mining by changing to a so-called "proof of stake" network. In that system, users put forward a stake to gain the right to verify transactions, rather than use vast amounts of computing power.
However, De Vries and Stoll, from the Dutch central bank and MIT respectively, noted that the traditional financial system also generates huge amounts of waste, from servers in bank branches to old ATMs.
"The six billion payment cards that are produced annually - with a lifetime of three to four years - illustrate the large scale," they said in the paper, published in the Resources, Conservation & Recycling journal.