Call it Bitcoin's other pollution problem.

The signature crypto-currency's giant carbon footprint, equal to that of Greece, is stoking concern about its future even among such fans as Elon Musk. What's much less appreciated is the volume of electronic waste the network generates. Miners are locked in an arms race to install ever-more-powerful machines that they're discarding at a faster and faster pace. The upshot: If its average price over the last two months of $47,000 holds, Bitcoin miners will soon be dumping the same volume of small IT equipment as the nation of Italy. Much of the toxic runoff from those mounds of metal refuse will leach into the soil and water supply. To put it mildly, the bulk of the world's Bitcoin isn't produced in places devoted to responsible collection and recycling of e-waste.

Now, a new study by economists Alex de Vries of the central bank of the Netherlands and Christian Stoll of MIT, published in the journal Resources, Convervation and Recycling, is spotlighting, as its title states, "Bitcoin's growing e-waste problem'." As the authors explain, the vast churn that's causing all that dumping is a byproduct of Bitcoin's business model. The share of Bitcoin that each miner wins is directly proportional to the percentage of the global computational power, or "hashrate," that the miner controls. The players can only grab bigger chunks of the total by constantly upgrading to more efficient computers that generate more hashes using the same amount of electricity, or even less. Since power is by far the miners' dominant operating expense, producers can both pocket more revenue and lower their costs per coin, hence greatly raising profits, if they keep adding new, more potent machines faster than their rivals. That's the arms race.

Those computers are highly specialized. They run on custom "application-specific integrated-circuit" or ASIC chips tailored to generate the random codes that unlock new awards of Bitcoin. Those ASIC-based devices can't be deployed for anything else; once a new, more potent generation supplants the former top performers, the miners junk the old stuff. According to the authors, that replacement cycle is shrinking fast. On average, today's miners are upgrading their computers every 1.29 years. That lifespan is extraordinary short, even by the standards of the most advanced IT gear.

De Vries and Stoll reckon that in May of this year, the Bitcoin network was devouring 117 million terawatts (TWh) of electricity annually. They also estimate that the miners are deploying 2.9 million ASIC-powered computers weighing a total of 39,750 metric tons. Hence, at a "churn rate" of 1.29 years, the Bitcoin world are trashing 30,700 metric tons of hash-spinning equipment annually.

That equals all the small electrical and electronic e-waste that the Netherlands discards each year. In 2020, the Bitcoin network processed 120 million transactions. For every sale or purchase recorded on the blockchain, the miners disposed of e-waste equal in weight to two iPhone 12 Minis. In other words, the industry trashed the equivalent of 240 million of the 135 gram mobile devices. Every time a miner pockets an award, it's as if they're burdening the environment by binning two iPhones.

As the report points out, relatively little of that debris gets handled in an environmentally friendly manner. A respected study that the authors cite estimates that just 17% of the world's e-waste is properly recycled. Though it's difficult to track what happens to the balance, most of the toxic metal is apparently buried, or heaped in piles above ground, polluting drinking water and ravishing farmland. In fact, the degree of responsible recycling is probably much lower for Bitcoin's e-waste than the world average. The authors note that an extremely high proportion of Bitcoin mining happens in such nations as Iran and Kazakhstan that have extremely poor records of collecting and recycling e-waste.

In a phone conversation, De Vries explained that Bitcoin's metal mountain will soon rise much higher. "The miners add equipment with a lag because of the global semiconductor shortage, with includes a dearth of ASIC chips," he says. "At a price of $47,000, the miners' costs are now a lot lower than the price of a Bitcoin. They have a big incentive to add to their hashrate faster than their competitors, and get a bigger share of an extremely lucrative market." He estimates that the rush will almost double the number of machines powering the network from 2.9 million to 6.3 million. The industry's electricity consumption would mushroom from 117 TWh to 206 TWh. The volumes of e-waste would swell even faster, according to De Vries' estimates, from 30,700 metric tons to 64,400 metric tons.

Today, Italy is generating 79,000 metric tons of small IT equipment waste a year. So at a minimum, the Bitcoin network will reach 82% of Italy's level when the chip bottleneck eases. De Vries notes, however, that his study makes conservative assumptions. "We forecast that all the machines in use when the miners can get the equipment they're seeking will be the newest, more potent ones," he says. "But they'll probably be a mix of newer and older models, as is the case today. Since the older computers use more electricity, the total waste could far exceed the 64,400 metric ton estimate." De Vries added that his study doesn't include other mining equipment that also becomes obsolete, or simply wears out, such as cooling devices and power supply units. Bitcoin production whirs 27-7, and stresses such gear to the max. It's highly possible, he says, that once the world's miners add all the equipment they're seeking, their e-waste output will zoom past that of the Mediterranean nation of 60 million.

De Vries, by the way, also cited a recent study predicting that Bitcoin's best-known pollution problem, its carbon footprint, will exceed Italy's by 2024. We'll soon see if the Bitcoin advocates demanding that the cryptocurrency go green will grapple with the e-waste issue. It's a hard reality to ignore: The higher Bitcoin's price goes––the more it succeeds––the faster grow the piles of toxic metal. And the faster the prospects of a green future fade.