Bitcoin – Environmental Friend or Foe

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?

It’s worse than Estonia but better than Denmark

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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