Bitcoin climate impact greater than gold mining, study shows | Bitcoin
Bitcoin is less “digital gold” and more “digital beef,” according to a study that suggests the cryptocurrency has a climate impact greater than gold mining and on the level of natural gas extraction or raising cattle for meat.
The research from the University of New Mexico, published in the journal Scientific Reports, assessed the climate costs of various goods as part of their overall market value.
Some, like coal, cause almost as much damage as the entire value of the market they support, a ratio of 95%, according to the analysis. Other commodities, such as pork production, generate huge climate impacts in absolute terms, but only because the market is so massive.
Bitcoin, on the other hand, lies in between the two. According to the economists, the climate damage from producing the digital currency has averaged 35% of market value over the past five years, peaking at 82% in 2020.
It can be compared to beef, which causes damage equivalent to 33% of the market, or natural gas, which reaches 46%. And that’s far more than gold, the commodity the cryptocurrency’s backers most compare it to, which has a climate impact of just 4% of its market value, thanks to its huge aggregate value dwarfing the huge environmental impact of its mining.
The digital currency’s disproportionate damage to the climate comes from its reliance on a data-processing process to verify transactions called “proof-of-work mining,” which requires huge outlays of electricity to participate and rewards those who do so with the chance to win some new bitcoin .
On more than one day out of 20 during the period the researchers investigated, the climate damage from these “bitcoin miners” overwhelmingly exceeded the value of the coins produced, due to this power consumption.
Some have argued that renewable energy can meet this demand, but the authors wrote that the climate damage for every dollar of value added was 10 times worse for bitcoin than for wind and solar generation – representing “a set of red flags for any assessment as a sustainable sector”. “.
This week, another study on the climate impacts of bitcoin found that the proportion of fossil fuel production used to prove work was far higher than claimed by proponents.
Cambridge University’s Bitcoin Electricity Consumption Index has long tracked the estimated power usage of the bitcoin network, but an update launched this month adds a new data set to the estimates: a “mining map.” This shows the geographic distribution of bitcoin miners.
By combining this data with previous studies on regional differences in electricity production, the researchers were able to estimate the proportion of production that is renewable.
“The results show that fossil fuels make up almost two-thirds of the total electricity mix (62.4%) and sustainable energy sources 37.6% (of which 26.3% are renewables and 11.3% nuclear),” wrote Cambridge’s Alexander Neumueller.
“The findings thus differ noticeably from industry findings that estimate the share of sustainable energy sources in bitcoin’s power mix to be 59.5%.”
But while the generation mix remains carbon-intensive, overall bitcoin emissions have fallen over the past 12 months due to the sharp decline in the value of the cryptocurrency.
Bitcoin prices, and thus the expected payouts to miners, have fallen by two-thirds, sending some out of business and causing others to curtail their activities, in the process cutting emissions by around 14% compared to 2021, the researchers estimate .
These emissions are comparable to the emissions from countries such as Nepal or the Central African Republic, says the Cambridge team.
