ALBUQUERQUE, N.M. — Bitcoin mining is more damaging to the planet than beef production and almost as environmentally unsustainable as using crude oil, a new study claims.
Researchers say the digital currency causes more damage to the climate over time. While Bitcoin has been compared to “digital gold,” the study suggests that it is much more energy intensive and is impacting the environment just like other industries that damage nature.
“Globally, the mining, or production, of Bitcoin is using tremendous amounts of electricity, mostly from fossil fuels, such as coal and natural gas. This is causing huge amounts of air pollution and carbon emissions, which is negatively impacting our global climate and our health,” says study co-author Professor Benjamin Jones from the University of New Mexico in a media release.
“We find several instances between 2016-2021 where Bitcoin is more damaging to the climate than a single Bitcoin is actually worth. Put differently, Bitcoin mining, in some instances, creates climate damages in excess of a coin’s value. This is extremely troubling from a sustainability perspective.”
Bitcoin emissions skyrocketed during the pandemic
The research team examined how Bitcoin damages the environment according to three sustainability criteria: whether the estimated climate damage is increasing over time, whether the climate damages of Bitcoin exceed market price, and how the climate damages as a share of market price compare to other industries and products.
Their results show that CO2-like emissions from Bitcoin mining have increased 126 times, from 0.9 tons per coin in 2016 to 113 tons per coin in 2021. The study estimates that each coin mined in 2021 caused $11,314 of climate damage, adding to the total global damages that exceeded $12 billion between 2016 and 2021.
The climate damages hit their peak in May 2020, according to the report, as 156 percent of the coin price caused environmental harm, making its climate damages more than the coin’s actual value. Each U.S. dollar of Bitcoin market value generated led to $1.56 in global climate damages that month, according to the findings.
Other industries are still doing more damage to the planet
While climate damages for Bitcoin averaged 35 percent of its market value between 2016 and 2021, it is still lower than other unsustainable industries and products. Climate damages for electricity produced by natural gas averaged 46 percent and gasoline produced from crude oil was at 41 percent.
However, Bitcoin’s environmental damage exceeds beef production, where climate damages make up 33 percent of the market value. The study calls for potential regulation on Bitcoin mining to make it more sustainable.
“Across the class of digitally scarce goods, our focus is on those cryptocurrencies that rely on proof-of-work (POW) production techniques, which can be highly energy intensive,” says Regents Professor of Economics Robert Berrens.
“Within broader efforts to mitigate climate change, the policy challenge is creating governance mechanisms for an emergent, decentralized industry, which includes energy-intensive POW cryptocurrencies. We believe that such efforts would be aided by measurable, empirical signals concerning potentially unsustainable climate damages, in monetary terms.”
“We find no evidence that Bitcoin mining is becoming more sustainable over time,” Prof. Jones concludes. “Rather, our results suggest the opposite: Bitcoin mining is becoming dirtier and more damaging to the climate over time. In short, Bitcoin’s environmental footprint is moving in the wrong direction.”
The findings appear in Scientific Reports.
South West News Service writer Alice Clifford contributed to this report.