The attack on bitcoin (BTC) has not stopped, even in the depths of a bear market; more research has questioned its energy use and its impact on the environment.
The latest work by researchers from the economics department at the University of New Mexico, published on September 29, states that, From a climate damage standpoint, bitcoin works more like “digital crude” than “digital gold.”
The research attempts to estimate the energy-related climate damage caused by bitcoin proof-of-work (PoW) mining and make comparisons with other industries. Alleges that between 2016 and 2021, on average every $1.00 in BTC market value created was responsible for $0.35 in global “climate damage”, adding:
“As a proportion of market value, it is in the range between beef production and crude oil burned as gasoline, and an order of magnitude greater than wind and solar power.”
The researchers conclude that the results represent “a set of red flags for any consideration as a sustainable sector,” adding that it is highly unlikely that the Bitcoin network will become sustainable by switching to proof-of-stake:
“If the industry doesn’t shift its production trajectory away from POW, or moves toward POS, this class of digitally scarce goods may need regulation, and the delay will likely lead to increased global climate damage.”
Lachlan Feeney, the founder and CEO of Australia-based blockchain development agency Labrys, recently told Cointelegraph after the merger that “the pressure is on” bitcoin to justify the PoW system in the long run.
However, there are always comparisons and arguments against. The University of Cambridge reports that the Bitcoin network currently consumes 94 terawatt hours (TWh) per year. To put this in context, US fridges alone consume more than the entire BTC network, at 104 TWh per year.
Furthermore, electricity losses from transmission and distribution in the United States alone are 206 TWh per year, which could power the Bitcoin network 2.2 times more. Cambridge also reports that the energy demand of the Bitcoin network has decreased by 28% since mid-June. This is likely due to miner capitulations during the bear market and the adoption of more efficient mining hardware.
There is also an argument that more mining is now done with renewable energy, especially in the United States.which has seen an influx of mining companies since China’s ban.
Earlier this month, former MicroStrategy CEO Michael Saylor criticized “misinformation and propaganda” about the Bitcoin network’s power usage.. He noted that metrics show that almost 60% of the energy for BTC mining comes from sustainable sources and that energy efficiency has improved 46% year over year.
Texas, which has become a mining mecca in recent years, is an example where renewable energy reigns: it is the largest producer of wind energy in the United States. Various mining operations have also been created to use leftover or wasted energy, such as gas flaring. In August, Cointelegraph also reported that the use of sustainable energy for mining BTC has grown almost 60% in one yearSo it’s not all doom and gloom.
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