Triple Bottom Tuesday >>> Is Bitcoin Destroying the Planet?
Updated: Feb 15
Picture Credit: Kanchanara
The controversial topic among the blockchain community that comes up from time to time about just how much Bitcoin mining impacts the environment has been befuddling many people for a while now. Much like a lot of other industries and their giants in the modern world, this too comes with its many dilemmas. While Bitcoin is gaining popularity fast, with a market cap of $830.84 billion by February 2022, the environmental impacts it brings on may be detrimental to the planet’s wellbeing.
Studies show that the geography of mining has changed drastically over the last year and experts say this will improve Bitcoin’s carbon footprint. Co-locating Bitcoin mining operations with zero-carbon resources, such as nuclear, hydro, wind and solar, could help reduce the carbon emissions associated with mining itself. In addition, Bitcoin miners are helping oil companies to cut flaring- the process of burning surplus natural gas during oil extraction due to a lack of pipeline infrastructure to bring it to market. U.S and Canadian Bitcoin miners have found ways to use this excess gas to generate electricity, instead of simply burning it into the atmosphere.
"We're literally burning the gas into the atmosphere just because it's not economical to do anything with it [Flaring]. Instead, we can put it into a motor to produce electricity and use that to mine Bitcoin", said Kristian Csepcsar chief marketing officer at Slush Pool, the oldest Bitcoin mining pool.
Although this is less harmful, it is a stretch, and making natural gas more valuable at the wellhead could further demoralise any development in projects for pipelines that would have moved the gas in question into the market.
Picture Credit: Jasmin Sessler
Studies warn that Bitcoin’s emissions alone could push global warming above 2°C within less than three decades to come. According to experts, Bitcoin mining generates about 96 million tons of carbon emissions each year. Even transactions with Bitcoin use a lot of energy, with an average transaction consuming over 1700 kWh of electricity, that’s roughly twice the amount consumed by an average U.S household within a month.
The Cambridge Bitcoin Electricity Consumption Index indicates that Bitcoin, uses 122.87 Terawatt-hours of electricity per year- more than the Netherlands , Argentina or even the United Arab Emirates. Another way to put it would be, the amount of electricity consumed by the Bitcoin network in one year could easily power all tea kettles used to boil water for around 30 years in the U.K , shocking isn’t it? Now, electricity may seem like a clean source of energy, but many countries burn fossil fuels in order to generate it. This adds to the CO2 in the atmosphere, expediting climate change.
Researches show, around 35% and 18% of the Bitcoin mining takes place in the U.S and Kazakhstan respectively as of 2021. With U.S generating 60% of its electricity through fossil fuels, it has become one of the world’s largest carbon emitters.
In May 2021, Tesla’s CEO Elon Musk’s reversal of their plan to accept BTC, on twitter led to a plummet in the value of Bitcoin, with over $365 billion in market value slashed off BTC at one point. Musk had tweeted; “Bitcoin. We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.” “Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment”.
Picture Credit: Matthias Heyde
The rise of Bitcoin has caused emissions to increase by over 40 million tons which is the equivalent of 8.9 million cars being added to the roads. A BofA report found that Bitcoin produces more carbon emissions than American Airlines, one of the largest airlines in the world.
Since the mining hardware quickly becomes out-of-date, the Bitcoin network also generates a significant amount of electronic waste, approximately amounting up to 30 thousand tons of electronic waste per year.
The impact on the surrounding ecosystems must also be taken into consideration. For example; according to the Columbia Climate School, The Greenidge Generation power plant in Dresden, New York, draws millions of gallons of water from Lake Seneca in order to cool itself while running, later discharging some of that water back into the lake at 30-50 degrees Fahrenheit above normal temperature, endangering the wildlife and even the surrounding vegetation.
With Bitcoin already worth roughly 830 billion, this, like any other brilliant and long-lasting industry , cannot afford to neglect the climatic changes rising alongside it. It must embrace sustainability.
February 15th 2022 | 7:15 PM