Featured Image Credit: Shutterstock/Shutterstock
Topics: Money, Climate Change, Bitcoin
Claire Reid
An expert has said Bitcoin’s ‘environmental footprint is moving in the wrong direction’ and that mining for the cryptocurrency is as bad for the environment as drilling for oil.
A new study, titled 'Economic estimation of Bitcoin mining's climate damages demonstrates closer resemblance to digital crude than digital gold', by researchers from the University of New Mexico has denied recent claims that Bitcoin mining is becoming more sustainable.
According to Coin Telegraph, a survey was conducted which claimed that the Bitcoin Mining Council (BMC) were harvesting electricity with a 'sustainable mix' of energy of 66.1 percent.
However, the researchers suggest that Bitcoin isn’t akin to ‘digital gold’, and that on an environmental level, mining Bitcoin is more comparable with drilling and refining crude oil or beef farming, both of which have a severe detrimental impact to the planet.
Advert
Study author Professor Benjamin Jones of UNM's economics school said: “We find no evidence that Bitcoin mining is becoming more sustainable over time.
“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.”
Professor Jones also claimed that on occasion, the cost to the environment is greater than the value of what a Bitcoin is actually worth.
He explained: “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.
“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.”
Analysing the data over the past few years, researchers discovered that the CO2 equivalent emissions from electricity generation for Bitcoin mining have increased 126-fold from 0.9 tonnes per coin in 2016, to 113 tonnes per coin in 2021.
A press release about the study claims that its calculations 'suggest each Bitcoin mined in 2021 generated $11,314 in climate damages, with total global damages exceeding $12 billion between 2016 and 2021’.
And that ‘damages peaked at 156 percent of the coin price in May 2020, suggesting that each $1 of Bitcoin market value generated led to $1.56 in global climate damages that month.’
The press release concluded that 'potential regulation' could be introduced to improve sustainability.
If you have a story you want to tell, send it to UNILAD via [email protected]