A recent study has proven that Bitcoin is less “digital gold” and more “digital beef, suggesting that the cryptocurrency has a climate impact greater than that of gold mining and on the level of natural gas extraction or rearing cattle for meat.
Undertaken at the University of New Mexico and published in the journal Scientific Reports, the study assessed the climate cost of various commodities as a portion of their overall market cap.
The analysis found that some, such as coal, cause almost as much damage as the entire value of the market they support, a 95% ratio while other commodities, such as pork production, generate huge climate impacts in absolute terms but only because the market is so massive.
The analysis however found that Bitcoin lies in between the two as the climate damage of producing the digital currency has averaged 35% of its market value over the past five years, peaking at 82% in 2020.
“That is comparable to beef, which causes harm equal to 33% of its market, or natural gas, which hits 46%” the analysis found. “And it is far more than gold, the commodity that the cryptocurrency’s backers most compare it to, which has a climate impact of just 4% of its market value, thanks to its enormous overall value dwarfing the large environmental impact of its extraction”.
The research further showed that digital currency’s disproportionate harm to the climate comes from its reliance on a computing process to verify transactions called “proof-of-work mining”, which requires huge electricity expenditures to participate, rewarding those who carry it out with the chance to win some new bitcoin.
The climate damage from these “bitcoin miners” exceeded the value of the coins produced, overwhelmingly due to that electricity consumption, on more than one day of 20 in the period the researchers examined.
Another different study on the climate impacts of bitcoin conducted this week found the proportion of fossil generation used to power proof of work was far higher than that claimed by advocates.
It is worthy to note that Cambridge University’s bitcoin electricity consumption index has long tracked the estimated power use of the bitcoin network, but an update launched this month adds a new dataset to the estimates: a “mining map”.
This shows the geographical distribution of bitcoin miners. Combining that data with previous studies on regional differences in electricity generation, the researchers were able to estimate the proportion of generation which is renewable.
Story was adapted from the Guardian.