Bitcoin cryptocurrency is often criticized because of its high-cost mining technology, but the process consumes about 0.05% of the world’s energy. And the process is 50 times as carbon-emitting as aviation.
That’s according to a new study by digital asset management company CoinShares. The authors of the report, “Bitcoin Mining Network: Energy and Carbon Impacts,” say they have developed a comprehensive model to estimate the scale of emissions and created their own data collection system.
BTC mining does not have a significant impact on the environment
As of December 2021, the annual electricity consumption of Bitcoin miners was 89 terawatt hours (TWh). That’s about 0.05% of the world’s total energy consumption (in 2019 it was 162,194 TWh).
As for the carbon footprint (the amount of carbon dioxide emitted by the industry in 12 months), mining does not have a significant impact on the environment either. According to the information provided by the researchers, cryptocurrency production is significantly inferior to other “polluters”:
Aviation — 1982 million tons of CO2;
maritime transport — 1,503;
air conditioning — 984;
gold mining — 123;
data centers — 100;
drum dryers — 53;
bitcoin mining — 41.
In addition, the network of the first cryptocurrency has a fairly low level of carbon intensity (the ratio of CO2 emissions to electricity consumed). With a global average of 492 g CO2/kWh, the countries that mine the majority of Bitcoin have an average of only 466 g CO2/kWh.
BTC mining: PoW vs PoS
It is worth noting that bitcoin is mined according to the Proof-of-Work (PoW) model. It is more energy-intensive than the alternative — Proof-of-Stake (PoS).
The fundamental difference between the two is that PoS rewards coins by storing them (stacking), while PoW mines new tokens by computation (mining). The latter method is considered to be more energy-intensive and therefore more damaging to the environment.
Regulators around the world, including the European Securities Market Surveillance Authority, have spoken out in favor of moving the first cryptocurrency network to PoS. But Proof-of-Work is the basic idea behind bitcoin and its only mining protocol.
In addition, experts call this model more secure against the threat of Attack 51 or corrupt behavior on the blockchain. Therefore, in a global sense, a move to PoS to protect the environment is unlikely to be realized in the next decade.