Climate Damage From Bitcoin Mining Grew More Than 125x Worse in Just 5 Years
Negative climate impacts of mining Bitcoin have grown over time. Carbon emissions per coin have multiplied 126 times
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The negative climate impacts of mining the cryptocurrency Bitcoin have grown rapidly over time, with carbon emissions per coin multiplying 126 times from 2016 to 2021.
During that window, the climate damage of mining one Bitcoin averaged 35% of a coin’s value, similar to the environmental costs of unsustainable products like crude oil and beef.
Reducing Bitcoin’s massive carbon footprint may require international regulation unless the cryptocurrency shifts to a more energy-efficient mining system.
With no physical form, the digital currency Bitcoin can feel all but invisible to those who don’t use it. However, its harmful climate impacts are all too real – and they’re getting worse.
Emissions from mining the cryptocurrency have skyrocketed, researchers reported recently in Scientific Reports.
“We find no evidence that Bitcoin mining is becoming more sustainable over time,” said economist Benjamin Jones of the University of New Mexico in a statement. “Rather, our results suggest the opposite: Bitcoin mining is becoming dirtier and more damaging to the climate.” (Jones and his two coauthors declined interview requests from Mongabay.)
Large-scale commercial mining farms draw electricity to power hundreds or even thousands of computers to mine as competitively as possible.
Photo: Marko Ahtisaari on Flickr and licensed under CC BY 2.0.
When someone buys or trades Bitcoin, computers in the network compete to solve a complex numerical puzzle. The winning computer then validates the transaction, earning its owner new Bitcoin. This process is called “mining.”
The computing power needed to mine Bitcoin, by far the world’s largest cryptocurrency by value, comes at a cost. Bitcoin in 2020 used 75.4 terawatt-hours of electricity — more than the country of Austria. Most of that electricity comes from burning fossil fuels like coal and natural gas, the researchers said.
Based on where miners operate and how those places produce electricity, they found, mining a coin in 2021 emitted 113 metric tons (111.2 imperial tons) of carbon dioxide on average, up from just 0.9 metric tons in 2016.
Assuming each metric ton of carbon dioxide causes $100 of environmental damage — a figure similar to those used by other researchers — then each Bitcoin mined in 2021 dealt over $11,300 of climate damages.
In the left graph, the line shows how the cost of Bitcoin’s climate damages per coin has risen over time, while the bars at the upper left show the same for carbon emissions per coin. In the right graph, the red section of the line indicates a window in 2020 when Bitcoin mining caused more climate damage than the coin itself was worth.
Image: Jones et al. (2022), Scientific Reports, and licensed under CC BY 4.0.
The trend arises from Bitcoin’s competitive “proof-of-work” mining system, the researchers said. As more miners join the fray and use more powerful computers to compete, electricity usage shoots up.
And to keep those miners from generating new Bitcoin too quickly and lowering its value, an algorithm raises the difficulty of the mining puzzles, demanding more electricity to solve them as time goes on.
Experts expect climate damages to continue as long as dirty fuels like coal remain cheap, especially given recent drops in Bitcoin’s value.
“Miners will start going from renewable energy to dirty energy, to coal power, just to increase their profit margin,” said finance professor Larisa Yarovaya at the University of Southampton, U.K., who was not involved in the study.
Bitcoin miners use specialized computers, or “rigs,” to compete on complex math problems, hoping to be the first to verify transactions and earn Bitcoin as a reward.
Photo: rebcenter-moscow on Pixabay.
Between 2016 and 2021, offsetting the climate damages of mining a Bitcoin would have cost 35% of that coin’s value, on average. By this standard, Bitcoin ranks alongside unsustainable products like crude oil and beef.
“This is such a speculative asset,” said Giovanni Compiani, a professor of marketing at the University of Chicago who was not involved in the study. Bitcoin’s value, Compiani said, swings dramatically and doesn’t always reflect the coin’s actual usefulness — but mining it always generates emissions.
Cryptocurrency doesn’t have to be so damaging, the authors noted.
In contrast to Bitcoin’s system, this approach eliminates competition between miners, reducing the number of computers at work at any given time. The move makes Ethereum less secure but will likely cut its energy use by over 99.9%.
Although Bitcoin is a virtual currency, some collectors trade metal coins with codes for amounts of Bitcoin printed on them, not unlike a gift certificate.
Photo: Dmitry Demidko on Unsplash.
That leaves regulation. But when China banned cryptocurrency last year, many miners there moved to the U.S. and Kazakhstan — where they sourced a greater portion of their electricity from gas and coal power.
Creating a climate-friendly crypto culture, he said, will require international coordination.
(Sean Cummings (@SciNonficSean) is a graduate student in the Science Communication Program at the University of California, Santa Cruz.)
(This article was originally published at Mongabay. It has been republished here with permission.)
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