The climate debate about Bitcoin has received new explosives through a study by the University of New Mexico. Scientists have examined the environmental footprint of mining using certain sustainability criteria. The result is sobering.
Where does the energy come from?
The trigger for the constant criticism of the Bitcoin life cycle assessment is the energy consumption, which has increased over the last few years. The reason for this is the power-intensive mining, in which blocks are attached to the blockchain and new Bitcoin is “mined”. The energy sources used and the resulting CO₂ emissions are problematic.
Bitcoin lobbyists argue that the share of renewable energies has increased. According to the Bitcoin Mining Council, it should already be 58 percent. However, the results of the study contradict this.
Climate damage from mining is increasing
The core thesis: The climate damage caused by Bitcoin has not decreased in recent years, but increased. “We found no evidence that Bitcoin mining is becoming more sustainable over time,” said Benjamin A. Jones of the University of New Mexico. “Our results tend to suggest the opposite: Bitcoin mining is becoming dirtier and more climate-damaging over time. In short, Bitcoin’s ecological footprint is moving in the wrong direction.”
According to the study, most of the electricity comes from coal and natural gas – around 61 percent. Only 39 percent come from renewable energies. “This causes massive amounts of air pollution and carbon emissions, which negatively impact our global climate and health,” Jones said.
What bitcoin costs the environment
The increase in the energy used for mining has also caused CO₂ emissions to rise significantly over the years. In 2016, one bitcoin was responsible for an average of 0.9 tons of CO₂. By 2021, it is said to have been 126 times that: 113 tons of CO₂ emissions for every bitcoin mined.
The researchers calculate the associated environmental damage: On average, every US dollar created in Bitcoin causes 35 cents in global climate damage. In some cases, the costs caused by climate damage are said to have even exceeded the equivalent value in Bitcoin generated by mining.
The high was reached in May 2020: 156 percent – in other words: every US dollar of BTC market value mined that month caused US dollars 1.56 “in global climate damage”. “We found multiple instances between 2016 and 2021 where bitcoin is doing more harm to the climate than a single bitcoin is actually worth,” explains Jones. Overall, the climate damage between 2016 and 2021 will amount to twelve billion US dollars, according to the study.
Comparable to beef?
If one compares the climate damage with other goods, Bitcoin “falls into the category of other energy-intensive or heavily polluting commodities”. For example beef, natural gas or petrol. The digital counterpart is also said to perform worse than physical gold: according to the study, between 2016 and 2021 the average climate damage caused by Bitcoin was 8.75 times higher than that of the precious metal.
The results are likely to cause heated debates in the Bitcoin community. Studies like these are always the impetus for proof-of-work ban debates. The empirical facts are still sparse, and the scientists also use estimates. As long as the research is based on assumptions and guesswork, Bitcoin’s ecological footprint should continue to be explosive.
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