Bitcoin more expensive for climate than beef, say economists • The Register
Far from being the “digital gold” that some claim, Bitcoin’s relative climate change impact is greater than that of the beef industry, and over seven times that of actual gold mining.
Economic researchers compared the environmental impact of Bitcoin – created by using brute computing power to crack complex algorithmic puzzles – with three measures of environmental impact between January 2016 and December 2021.
Led by Benjamin Jones, associate professor of economics at the University of New Mexico, they looked at whether the estimated climate damage increases over time. They also looked at whether the market price of Bitcoin exceeds the economic costs of climate damage and how the climate damage per mined coin compares with climate damage in other sectors and goods.
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Astonishingly, they found that in 2020 Bitcoin mining used 75.4 terawatt hours per year (TWhyear-1) – higher energy use than Austria (69.9 TWhyear-1) or Portugal (48.4 TWhyear-1).
The researchers found that energy emissions for Bitcoin mining had grown 126-fold from 0.9 tons of emissions per coin in 2016 to 113 tons per coin in 2021. One Bitcoin mined in 2021 created $11,314 in climate damage, with total global damage exceeding $12 billion dollars or 25 percent of market prices. The damage peaked at 156 percent of the coin price in May 2020, so that every $1 Bitcoin market cap led to $1.56 of global climate damage.
Taking the relative damage to Bitcoin to average between 2016 and 2021 at 35 percent of its market value, the economists went on to compare the cryptocurrency’s climate impact with other industries. Although less than electricity produced from natural gas (46 percent) and gasoline produced from crude oil (41 percent), it was slightly greater than the relative damage to beef production (at 33 percent) and much more than gold mining (at 4 percent) percent ).
“Taken together, these results represent a set of red flags for sustainability. Although proponents have offered BTC as representing ‘digital gold’, from a climate damage perspective it functions more like ‘digital crude oil,'” the authors said in the paper published in Nature Scientific Reports this the week.
They went on to suggest that the study could drive changes in regulation to make Bitcoin mining sustainable.
Evidence of Bitcoin’s environmental impact appears to be mounting as its price has fallen over the past year, but alternatives are lining up to take its place for those with an eye on the planet’s future habitability.
Rival cryptocurrency Ethereum has made the transition from proof-of-work to proof-of-stake validation, the so-called Fusion that some commentators suggest could reduce carbon emissions by 99 percent. ®
