Bitcoin (BTC) bashing has continued unabated even in the depths of a bear market with more research questioning energy use and its impact on the environment.
The latest research paper by researchers at the University of New Mexico Department of Economics, published on September 29, claims that from the perspective of climate damage, bitcoin acts more like “digital crude” than “digital gold.”
The research attempts to estimate the energy-related climate damage from Bitcoin mining for Proof of Work (PoW) and make comparisons with other industries. It claims that, on average, between 2016 and 2021, every $1 of the bitcoin market capitalization was responsible for $0.35 in “global climate damage,” adding:
“Which is considered as a share of market value in the range between beef production and crude oil burned as gasoline, and an order of magnitude greater than wind and solar energy.”
The researchers concluded that the results represented “a set of red flags for any consideration as a sustainable sector,” adding that the Bitcoin network is unlikely to become sustainable by switching to Proof of Stake:
“If the industry does not shift its production trajectory away from POW, or move toward point of sale, this category of digitally scarce goods may need to be regulated, and delays are likely to increase global climate damage.”
Recently, Lachlan Feeney, founder and CEO of Australian blockchain development agency Labrys, told Cointelegraph after the merger that “pressure” Bitcoin to justify the PoW system in the long run.
There are always comparisons and counter-arguments. The University of Cambridge currently reports that the Bitcoin network currently consumes 94 terawatt-hours (TWh) per year. To put this in context, all refrigerators in the US alone consume more than the entire BTC network at a rate of 104 TWh per year.
Moreover, electricity losses to transmission and distribution in the US alone are 206 TWh per year, which could potentially power the Bitcoin network 2.2 times. Cambridge also reported that demand for Bitcoin network power has fallen by 28% since mid-June. This is likely due to miners’ concessions during the bear market and the adoption of more efficient mining hardware.
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There is also an argument that more mining is now done using renewable energy, especially in the United States which has seen an influx of mining companies since China was banned.
Earlier this month, former MicroStrategy CEO Michael Saylor criticized “misinformation and propaganda” regarding the energy use of the Bitcoin network. He noted that metrics show that nearly 60% of the energy used in bitcoin mining comes from sustainable sources and that energy efficiency has improved by 46% year-over-year.
Texas, which has become a mining hub in recent years, is one example of a renewable energy source – it is the largest producer of wind energy in the United States. Many mining operations have also been set up to use excess or wasted energy such as burning gas. In August, Cointelegraph also reported that the sustainable energy use of BTC mining has grown by nearly 60% in one year, so it’s not all bad and gloomy.
