The environmental costs of the digital cryptocurrency Bitcoin are shockingly high and are only getting worse, according to a study from the University of New Mexico. The experts report that the climate impacts from mining Bitcoin are comparable to that of natural gas or beef production.
“We find no evidence that Bitcoin mining is becoming more sustainable over time,” said Professor Benjamin A. Jones. “Rather, our results suggest the opposite: Bitcoin mining is becoming dirtier and more damaging to the climate over time. In short, Bitcoin’s environmental footprint is moving in the wrong direction.”
In collaboration with Professor Robert Berrens and Andrew Goodkind, Professor Jones estimated the climate damages associated with Bitcoin mining between January 2016 and December 2021. The experts found that in 2020 alone, Bitcoin mining used 75.4 terawatt hours of electricity (TWh). This is higher than the electricity used by Austria or Portugal during the same year.
“Globally, the mining, or production, of Bitcoin is using tremendous amounts of electricity, mostly from fossil fuels, such as coal and natural gas. This is causing huge amounts of air pollution and carbon emissions, which is negatively impacting our global climate and our health,” said Professor Jones.
“We find several instances between 2016-2021 where Bitcoin is more damaging to the climate than a single Bitcoin is actually worth. Put differently, Bitcoin mining, in some instances, creates climate damages in excess of a coin’s value. This is extremely troubling from a sustainability perspective.”
The study also revealed that the CO2 equivalent emissions from electricity generation for Bitcoin mining increased 126-fold from 2016 to 2021.
The estimates indicate that each Bitcoin mined in 2021 generated $11,314 in climate damages, with total global damages exceeding 12 billion dollars between 2016 and 2021. The calculations also suggest that in May 2020, each dollar of Bitcoin generated was associated with $1.56 in global climate damages.
“Across the class of digitally scarce goods, our focus is on those cryptocurrencies that rely on proof-of-work (POW) production techniques, which can be highly energy intensive,” said Professor Berrens. “Within broader efforts to mitigate climate change, the policy challenge is creating governance mechanisms for an emergent, decentralized industry, which includes energy-intensive POW cryptocurrencies. We believe that such efforts would be aided by measurable, empirical signals concerning potentially unsustainable climate damages, in monetary terms.”
The research is published in the journal Scientific Reports.
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