Sustainability analysis of bitcoin mining

Blockchain technology is considered a disruptive technology that could revolutionize the financial system with its applications in fintech. While the use of blockchain technology has accelerated in various fields globally, the dilemma about energy utilization of this technology is unfolded. The most energy-consuming application of blockchain technology, Bitcoin mining, has been particularly questioned in the literature for its sustainability. In the present study, the hardware used for Bitcoin block production is evaluated from a thermodynamics perspective to solve the mystery of sustainability in block production lasting for the past decade. Changes in difficulty level in block algorithm and mining hardware's thermal power usage are considered to determine the second law efficiency of the mining process. Our findings suggest that graphics processing units (GPUs) initially used in mining and application-specific integrated circuits (ASICs) specifically designed and manufactured for Bitcoin block mining become inefficient over time, which needs to be switched with more efficient technology. This study implies that the second law efficiency of hardware used in block production declines with time before hitting a plateau, indicating a warning about the unsustainable time and switching more efficient mining hardware for miners and technology makers ahead of time.