Bitcoin as bad for climate change as a large city - study

Bitcoin might be a virtual currency, but its impact on the climate is very real.

The computing power needed to run the online currency produces carbon emissions equivalent to a large city, according to new research.

And it's getting worse, with the amount of processing power spent on bitcoin quadrupling in 2018, according to researchers at the Technical University of Munich (TUM).

Bitcoin transactions work by getting computers around the world to do calculations. The owners of these computers - known as miners - are rewarded in small amounts of bitcoins they can trade or spend.

Though there are now dozens of different 'cryptocurrencies', bitcoin was the first and remains the most widely used and traded. Some enterprising miners have even set up 'farms' of computers to do calculations, hoping to profit by speculating on the currency, which is prone to wild swings in value.

"In those operations, extra energy is needed just for the cooling of the data centre," said TUM researcher Christian Stoll.

The analysis was complex. The study took into account where miners were located, and the types of energy consumed in those places - fossil fueled-cities would generate more carbon emissions than those using renewable or nuclear-power, for example.

Slightly more than two-thirds of bitcoin mining happens in Asia, they found, with most of the rest in Europe, North America and Venezuela.

All-up, they estimate bitcoin mining produces more than 22 million tonnes of carbon emissions a year.

"That is comparable to the footprint of such cities as Hamburg [and] Vienna," which are comparable population-wise to Auckland, or entire nations with lower per capita energy use, such as Sri Lanka or Jordan.

The researchers say while small in the grand scheme of things, it's "big enough to make it worth discussing the possibility of regulating cryptocurrency mining in regions where power generation is especially carbon-intensive".

The study was published in journal Joule.