New research conducted at the University of New Mexico showed that bitcoin mining is environmentally unsustainable, resulting in climate damage equivalent to about 35% of its market value.
Bitcoin (BTC), the world’s most controversial cryptocurrency, has an impact on climate greater than the one generated from beef production and nearly as big as the environmental impact caused by crude oil, new research found.
Published last week in the journal Scientific Reports, the new study from the University of New Mexico in Albuquerque assessed the energy-related climate damages of Bitcoin mining as a portion of its overall market cap. The evaluation of bitcoin’s environmental damage over a period of 5 years – from 2016 to 2021 – led to worrisome findings.
Researchers found that per coin climate damage from Bitcoin increased proportionally to the industry’s growth over that time. Moreover, environmental deterioration exceeded the price of each coin created and averaged 35% of its market value over the last five years. This means that each US$1 BTC resulted in $0.35 global climate damages. In 2020, the damage peaked at 82% of the cryptocurrency’s market value.
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The environmental degradation of bitcoin mining is comparable to that of beef production, which results in damages equivalent to 33% of its value, and that of natural gas extraction, which averages at about 46%.
The reason for the devastating environmental repercussions of bitcoin mining lies in this technology’s reliance on computing processes to verify transactions, known as “proof-of-work-mining”.
For a bitcoin purchase to solidify, it must make it to the blockchain – but before this can happen, it has to be confirmed by supervisors, a.k.a. the miners. They supervise the process, ensuring each transaction’s verification is carried out without interference before grouping transactions into blocks that are then added to the blockchain. Entire warehouses of hardware are dedicated to this and they consume enormous amounts of electricity each day.
To make matters worse, Bitcoin farms are often located in countries that heavily rely on fossil fuels, such as Kazakhstan, Iran, and Kosovo, raising concerns among environmentalists. Here, the already energy-intensive process has an even higher environmental impact than in countries that diversify their energy sources using renewables or even nuclear energy.
Bitcoin mining is estimated to generate between 22 and 22.9 million metric tons of carbon dioxide emissions a year, equivalent to emissions by countries like Jordan and Sri Lanka, or about 1% global electricity consumption. A study published in 2021 even suggested that BTC emissions alone cold push global warming above 2C.
Fortunately, many better alternatives exist to the world’s most well-known cryptocurrency. On average, other cryptos use 99% less electricity than Bitcoin.