Researchers from the University of New Mexico in Albuquerque, USA, said that Bitcoin mining affects the climate as much as beef or burning gasoline, if taken as a share of market value.
The economic loss from climate-related mining exceeded market value on 6.4% of the days it traded between 2016 and 2021, said Bloomberg.
The researchers calculated the climate cost of mining Bitcoin against its average market price and compared it to other commodities such as oil, gold or beef. The results reflect not the total emissions of these industries, which would be much larger, but their relative impacts.
The paper noted that the climate impact of gold mining, to which bitcoin is often compared, is only 4% of its average market price on average per year, compared to 35% for bitcoin between 2016 and 2021. And its impact on the environment is growing.
"While proponents have proposed bitcoin as a symbol of 'digital gold', it works more like 'digital oil' in terms of climate damage," the researchers said.
They emphasized the need to find more efficient ways to produce tokens or increase regulation .
Bitcoin Carbon Footprint
The article highlighted that Bitcoin mining, which accounts for approximately 41% of the global cryptocurrency market, consumed more energy than was used in all of Austria or Portugal in 2020. The mining of Bitcoin, Ether, Litecoin, and Monero generated between 3 and 15 million metric tons of carbon dioxide emissions between January 2016 and June 2018, equivalent to the emissions of Afghanistan, Slovenia, or Uruguay in 2018.
Bitcoin's carbon footprint also grows over time, as multiple miners compete to verify transactions on the blockchain to mine new coins. The fact that an ever-increasing number of miners are competing to solve increasingly complex operations means that the overall energy consumption is increasing, the article explained.
Because of this, a Bitcoin mined in 2021 would emit approximately 113 metric tons of CO2 equivalent — 126 times more than a Bitcoin mined in 2016, the researchers noted. They estimated the economic cost of this damage at $11,314 per bitcoin mined in 2021, while the cost of the total climate damage caused by all bitcoins from 2016 to 2021 could reach $12 billion.
The article noted that the sharp drop in profits from Bitcoin mining forced people to use more efficient machines, which led to a decrease in greenhouse gas emissions from the industry. Experts predict that emissions from cryptocurrency will be 14.1% lower in 2022 than in 2021, which is about 0.1% of human emissions worldwide and about half of what gold miners produce in absolute terms.
Also, they are starting to use more green energy for mining. The researchers believe that if RES accounted for 88.4% of the total electricity for Bitcoin mining between 2016 and 2021, the damage to the climate would be reduced to 4% of the average market price level.
“Another way to reduce the impact on the climate is to switch to a different transaction verification mechanism — and coin production. Ether, the second-largest cryptocurrency, this year switched to a mechanism called Proof of Stake, which, according to a study, should reduce expected energy consumption by more than 99%,” the article says.
Earlier, EcoPolitic wrote, that in 2021, the carbon emissions of the Brazilian company JBS, which is the world's largest meat producer, amounted to 421.6 million metric tons of carbon, which is more than Italy's emissions.
As EcoPolitic previously reported, the construction of the world's largest building plant that will absorb carbon dioxide from the air and will hide it underground has begun in Iceland.
