Even though Bitcoin (BTC) is in the middle of a bear market, the attacks on it haven’t stopped, and more research is being done to question how much energy it uses and how it affects the environment.
Researchers in the economics department at the University of New Mexico’s most recent paper, which came out on September 29, say that Bitcoin is more like “digital crude” than “digital gold” when it comes to the damage it does to the environment.
The research tries to figure out how much energy-related damage proof-of-work (PoW) Bitcoin mining does to the environment and compares it to other industries. It says that between 2016 and 2021, each $1 in BTC market value led to an average of $0.35 in “climate damages” around the world.
“Which, in terms of market value, is somewhere between beef production and crude oil burned to make gasoline, and a thousand times more valuable than wind and solar power.”
The researchers say that the results show “a set of red flags for any consideration as a sustainable sector.” They also say that switching to proof-of-stake is not likely to make the Bitcoin network sustainable:
“If the industry doesn’t move away from POW or toward POS, this class of digitally scarce goods may need to be regulated, and the longer this takes, the more damage it will do to the climate around the world.”
Lachlan Feeney, the founder and CEO of an Australian blockchain development company called Labrys, told Asian trade after the Merge that “the pressure is on” Bitcoin to show that the PoW system is worth it in the long run.
But there are always other points of view and arguments. The Bitcoin network uses 94 terawatt hours (TWh) of energy every year, according to the University of Cambridge. To put this in perspective, all the refrigerators in the United States use more energy than the whole BTC network, which uses 104 TWh per year.
Also, just in the U.S., electricity is lost during transmission and distribution at a rate of 206 TWh per year, which is enough to power the Bitcoin network 2.2 times over. Cambridge also says that the amount of power needed by the Bitcoin network has gone down by 28% since mid-June. This is likely because miners gave up during the bear market and switched to better mining hardware.
Nic Carter hits back at people who say Bitcoin is bad for the environment.
There is also the argument that more mining is now done with renewable energy, especially in the U.S., which has gotten more mining companies since China banned it.
This month, Michael Saylor, who used to be the CEO of MicroStrategy, criticised “misinformation and propaganda” about how much energy the Bitcoin network uses. He said that the numbers show that almost 60% of the energy used to mine Bitcoin comes from renewable sources, and that energy efficiency has gone up by 46% from one year to the next.
In recent years, Texas has become a big place for mining. It is also the largest producer of wind power in the U.S., so it is a good example of a place where renewables rule. Several mining operations, such as gas flaring, have also been set up to use energy that would have been wasted otherwise. Asian Trade also reported in August that the amount of sustainable energy used for BTC mining has grown by almost 60% in a year, so it’s not all bad news.
