Bitcoin mining is almost as environmentally unsustainable as crude oil

New research has revealed that Bitcoin mining is nearly as environmentally damaging as beef production and oil drilling.

While the digital coin continues to plummet in value, eco-conscious investors could also be deterred as a new study shows how Bitcoin is energy-intensive, impacting the climate as much as gold mining and beef production.

Co-author of the study Professor Benjamin Jones of the University of New Mexico, said: “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.

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“We find several instances between 2016 and 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 research project examined how Bitcoin damages the environment with three main criteria, including if estimated climate damage grows over time, whether the climate damages of Bitcoin exceeds market price, and how the climate damage as a share of the market price compared to other industries and sectors.

The results showed that carbon emissions from Bitcoin mining have increased by a staggering 126 times, from 0.9 tonnes per coin in 2016 to 113 tonnes per coin in 2021.

Climate damages for Bitcoin averaged at 35 per cent of its market value between 2016 and 2021. This was less than the climate damages compared to the market value of electricity produced by natural gas (46 per cent) and gasoline produced from crude oil (41 per cent). 

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However, it was almost in the same league as beef production, which makes up 33 per cent and is far more damaging than gold mining (four per cent.).

While researchers are calling for the cryptocurrency to become more sustainable, it looks like the worst is yet to come.

Study co-author Professor Robert Berrens said: "We believe that such efforts would be aided by measurable, empirical signals concerning potentially unsustainable climate damages, in monetary terms.”

He added: "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.”