Bitcoin Is As Bad for the Environment As Beef, Finds Study
Bitcoins have made many people millionaires overnight. — with their success stories inspiring many others to invest in decentralized digital currencies. But just like there are no free lunches, success, too, comes at a cost. In the case of cryptocurrency, the climate-related impact of digital mining may be sharper and more severe than previously estimated.
Published in the journal Scientific Reports, a new study found that the climate impact of mining bitcoins matches that of extracting natural gas or rearing cattle for food consumption, surpassing that of gold mining by far. This adds to the already mounting evidence against bitcoin’s environmental footprint — suggesting that a sustainable future for cryptocurrencies, and especially bitcoins, might not be in the cards.
The environmental damage by the beef industry stands at 33% of its market value. For natural gas, the corresponding share is 46%. Bitcoin finds itself midway between these destructive forces — extracting a toll equivalent to 35% of its market value. Gold, on the other hand, which bitcoins are often compared to, has a climate impact of just 4%. Bitcoin is anything but “digital gold” then, and researchers argue its future is more responsibly plotted if it were compared to other industries like beef, crude oil, or natural gas. It’s more of “digital beef” than “digital gold,” the researchers noted.
This raises important questions about how bitcoin — and the larger culture of cryptocurrency — must reckon with a future that demands sustainability.
Bitcoin relies on “proof-of-work mining” — a computing process that requires vast amounts of electricity. “In addition, the computers consume additional energy because they generate heat and need to be kept cool,” notes an article by Columbia Climate School. “[W]hile it’s impossible to know exactly how much electricity bitcoin uses because different computers and cooling systems have varying levels of energy efficiency, [an analysis] estimated that bitcoin mining consumes 121.36 terawatt hours a year. This is more than all of Argentina consumes, or more than the consumption of Google, Apple, Facebook, and Microsoft combined.”
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The environmental impact is precisely what the present study highlights, comparing bitcoin’s impact in context to other energy-intensive industries. It’s so bad that according to the researchers, it presents “a set of red flags for any consideration as a sustainable sector.” Commenting on the findings, The Guardian noted, “The climate damage for each dollar of value created was 10 times worse for bitcoin than for wind and solar generation.”
The growing obsession with cryptocurrency, which is often touted as the market “cool people” invest in, presents a grim truth. “Bitcoin is literally anti-efficient… So more efficient mining hardware won’t help — it’ll just be competing against other efficient mining hardware. This means that bitcoin’s energy use, and hence its CO2 production, only spirals outwards,” warned David Gerard, author of the book Attack of the 50 Foot Blockchain. “It’s very bad that all this energy is being literally wasted in a lottery.”
Experts have been warning against the havoc cryptocurrencies are wreaking on the climate for a long time. “It is really by design that Bitcoin consumes that much electricity… This is not something that will change in the future unless the Bitcoin price is going to significantly go down,” Michel Rauchs, a researcher at The Cambridge Centre for Alternative Finance, had told BBC in February 2021.
Indeed, a sharp fall in the value of cryptocurrencies over the past year has been able to reduce its impact on the climate, The Guardian reported. But with periodic rises and falls being almost a defining feature of the financial landscape, there’s nothing to guarantee that emissions from the mining of bitcoins will never get worse.
However, it appears that cryptocurrency isn’t going away anytime soon — at least, not before bitcoins have had a chance to worsen the climate crisis. The alarming data that the present study has put forth, then, reinforces an urgent need to place environmental concerns at the front and center as we evaluate the sustainability of bitcoins.