A new report suggests that bitcoin is bad: very bad. It’s so bad for the environment, it’s on par with hardcore beef production, and it’s far worse than gold mining.
Bitcoin and Beef… The Former’s Worse?
The paper is co-authored by Benjamin A. Jones, an associate professor of economics at the University of New Mexico. In a recent interview, he commented:
[This energy use] is because of the proof of work production process that [bitcoin] uses. Miners all over the world use highly specialized computer equipment to engage in a massive number guessing game. The more and better your equipment, the faster you can guess the right result before your competition. This leads miners to invest in more and better equipment that uses more and more electricity. Magnify this across thousands of miners all over the planet, and it leads to huge energy use. Plus, the fact that the difficulty of the guessing game a miner is asked to engage in increases over time, too (thus requiring more energy).
We have received hundreds, if not thousands of these reports over the years. Many scientists, analysts, and other eco-friendly individuals all say that using energy to mine and extract bitcoin could potentially harm the planet. They also say that mining bitcoin, in some cases, uses more energy than some developing countries.
Jones says that one of the big problems associated with bitcoin extraction stems from many projects relying purely on fossil fuels and similar (less green) resources. He stated:
We find that bitcoin’s climate footprint compares more to beef production and crude oil burned as gasoline and is much more damaging than gold mining or even chicken or pork production.
Too Much Energy Use
Throughout the report, Jones likens crypto mining to beef plants in countries like the United States given the amount of dioxide that gets released in the air. He says that right now, only 33 percent of climate damage can be attributed to beef production and only four percent can be attributed to gold mining. He states that bitcoin is worse than both combined and mentioned:
We know the location of many bitcoin miners through their participation in mining pools. We can get IP addresses. We then can figure out how many coins are estimated to be mined in each country each day. We can use information on the electricity mix in these countries, combined with the energy needs to mine, to estimate emissions. From emissions, we can obtain climate damages using the social cost of carbon. Bitcoin is the worst because it has the largest energy footprint. No other coin comes close. If bitcoin mining continues to use the proof-of-work production scheme and continues to rely primarily on fossil fuel power sources, which our work shows is the case between 2016-2021, then its environmental impacts will not shrink.