The Environmental Impact of Bitcoin Mining
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Bitcoin (BTC) mining has been the subject of much criticism over the past few years as mining operations have quickly expanded throughout the world. Several federal regulators across the globe have called for the curtailing or outright banning of bitcoin mining, citing the impact it has on the environment through its extreme energy consumption and carbon emission. The European Union has seen renewed calls for a “ban” on Bitcoin mining, and the United States government has held several hearings to discuss the ramifications of cryptocurrency mining in regards to not only its global impact but also how it affects local ecosystems and consumer electricity costs.
While the concern for cryptocurrency mining’s environmental impact are certainly valid, a new study on global mining operations by CoinShares suggests that some of the criticisms relayed against Bitcoin may be exaggerated. The report estimates that BTC mining has emitted 42 megatons (Mt, 1Mt is equivalent to 1 million tons) of carbon dioxide (CO2) in 2021. This figure accounts for less than 0.08% of the world’s total emissions of 49,360 Mts of CO2 in 2021.
The study also contains figures regarding the total carbon intensity emission breakdown of all global mining countries, revealing which nations are taking a “cleaner” approach to energy production and which are in-line with the purported narrative of environmental pollution.
It is important to note that while the U.S. accounts for 447g/kWh in terms of total carbon intensity, the U.S. has reached an estimated 49% percent of the total global hashrate contribution. This suggests that although Bitcoin mining operations conduct business in the U.S. more than anywhere else in the world, a larger proportion of miners implement more efficient and “cleaner” processes of mining compared to other parts of the world.
Another important figure to consider is the carbon intensity of hashing, which is the measurement of how much carbon is emitted in relation to the amount of processing power committed to the Bitcoin network. CoinShares’ study suggests that while the Bitcoin hashrate has continued to increase and reach new all time highs throughout 2021 and into 2022, the carbon intensity of hashing has decreased over time.
These figures suggest that even though the Bitcoin mining community continues to grow over time, more and more participants are relying on “cleaner” sources of power compared to earlier in Bitcoin’s history. The report also provides a breakdown of the sources of energy that the Bitcoin mining community has utilized over the past two years.
This example suggests that pollutable sources such as coal have diminished in overall use around the world as other sources such as natural gas, wind, nuclear, and solar have increased in total allocation. There is still much more work to be done in regards to promoting renewables and cleaner sources of energy for global Bitcoin mining operations, but the study shown above clearly indicates that Bitcoin is heading in the right direction.