Reading time: ~2 m
In terms of climate damage, bitcoin acts more like “digital oil” than “digital gold.” This is stated in an article by researchers from the Economics Department of the University of New Mexico.
According to scientists, between 2016 and 2021, for every dollar of Bitcoin market value created, there was an average of $0.35 of global “climate damage”.
“On this scale, bitcoin mining is in the range between the production of beef and crude oil burned as gasoline, and an order of magnitude higher than wind and solar energy,” the authors of the study added.
They concluded that the mining of the first cryptocurrency has too many “red flags” to be considered as a sustainable sector of the economy. The transition of the network to the Proof-of-Stake (PoS) consensus algorithm could not radically change the situation, the scientists added.
“If the industry does not transition from PoW to PoS, then this class of scarce digital goods may need to be regulated. Such a delay is likely to increase global climate damage.
According to CCAF, the bitcoin network currently consumes 94 TWh per year. For comparison, the annual cost of all refrigerators in the US is 104 TWh.
At the same time, electricity losses during transmission in the United States alone reach 206 TWh per year. This could provide twice as much power to the blockchain of the first cryptocurrency, although the need for power has decreased by 28% since mid-June.
According to CCAF, the share of green energy sources in mining is 37.6%. Bitcoin Mining Council in the second quarter of 2022 estimated this figure at 59.5%.
Recall that in early September, the White House released a report in which it called on regulators to discuss imposing tough measures on bitcoin mining due to its large carbon footprint.
In the same month, the non-governmental environmental working group Environmental Working Group announced the need for bitcoin to switch to the Proof-of-Stake algorithm.
CCAF has calculated that since the creation of the Bitcoin network and until September 21, 2022, the miners of the first cryptocurrency produced 199.65 million tons of carbon dioxide equivalent. The annual figure is at the level of 48.35 million tons of CO₂, which is 0.1% of global emissions.
#Scientists #call #bitcoin #digital #oil #impact #climate