There’s a good chance you’ve seen at least some of the headlines by now: Bitcoin use causing huge CO2 emissions | Bitcoin Mining Guzzles Energy—And Its Carbon Footprint Just Keeps Growing | Bitcoin’s climate change impact may be much smaller than we thought
Bitcoin’s
effect on the environment has been a hotbed of discussion, dating almost all of
the way back to when the cryptocurrency first launched in 2009. And now, over
ten years later, researchers are still having trouble agreeing on an answer.
What is Bitcoin’s carbon footprint?
Depending on
which study you cite, Bitcoin’s carbon footprint ranges from as little as 22
annual megatons of CO2 to estimates of over 50 megatons each year.
Although
numerous factors contribute to Bitcoin’s carbon footprint, it’s the network’s
mining activities that have the most substantial effect.
Stationed
around the world, Bitcoin miners consume a massive amount of energy to verify
transactions and maintain the network. According to Digiconomist, Bitcoin
miners consume just under 75 TWh of energy each year – the equivalent of about
10.5 million German citizens.
But
Bitcoin’s massive energy consumption doesn’t necessarily mean it’s terrible for
the environment. So just how bad is it?
Without
making some comparisons, it’s difficult to gauge how severe Bitcoin’s carbon
footprint is actuality. To help put things into perspective, let’s treat the
data as if Bitcoin were a country.
As a
country, the Bitcoin network has the 85th largest carbon footprint in the
world, assuming our low-end output estimate of 22 megatons of CO2. Looking
towards the upper 50 megaton output, though, it rises to within the top 60.
While
Bitcoin doesn’t have as much of an impact on the environment as some developed
countries (Denmark, Spain, Belgium), it does produce significantly more CO2
than others (Estonia, Guatemala, Iceland).
Thankfully, there are some solutions
Bitcoin’s
carbon footprint is undoubtedly nothing to shrug at. And as the mining
difficulty continues to increase, miners will need to expend more energy to
remain profitable. If they don’t find solutions to operate more efficiently,
Bitcoin’s carbon footprint will continue to grow.
As the rest
of the world is moving toward renewable energy sources, Bitcoin mining is
evolving along with it. According to a CoinShares report from June of last
year, 74.1 percent of Bitcoin miners utilize renewable resources such as solar,
wind, and most importantly, hydropower.
The future of Bitcoin’s carbon footprint looks promising
While it’s
unlikely that Bitcoin will ever switch to a Proof-of-Stake consensus mechanism,
its operations should continue to become greener. Driven by profits, Bitcoin
miners are going to utilize whichever energy source is cheapest and most
efficient. Thankfully for us and Mother Earth, renewable are trending in that
direction.
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