Recent research on Bitcoin’s environmental and climate impact suggests that it may be the literal embodiment of ‘dirty money.’ According to The Guardian, the digital coin has a greater climate impact than gold mining, natural gas extraction, or cattle rearing for meat.
Bitcoin and Its Staggering Climate Damages
As cryptocurrencies like Bitcoin are not held in a physical central bank, instead it requires a decentralized worldwide network of powerful computers to keep their value afloat. The goal of these devices, called “miners,” was to create a decentralized payment system that would fundamentally change how we buy and sell everything.
The conversation about the terrible effects of operating the blockchain has been rekindled due to a publication written by researchers from the University of New Mexico. The paper discusses the energy-related climate damages of mining Bitcoin, signaling that its climate damages may be unsustainable.
Virtual currencies have seen rapid growth in recent years, but they have also had a significant impact on climate change due to the enormous amount of electricity that computers need to manage the buying and selling of cryptocurrencies such as bitcoin.
Unbelievably factual information from Digiconomist informs us that the tread for the cryptocurrency lead platform uses about 150 terawatt-hours of electrical energy annually just to stay operational. This amount of energy is said to be comparable to what the entire United Arab Emirates uses in electricity in a single year.
This results in an annual release of roughly 65 million tonnes of carbon dioxide, which is comparable to Greece’s entire emissions. A previous Tech Times report suggested that emissions from bitcoin last year may have exacerbated 19,000 additional pollution-related deaths in the future.
A Resemblance to Digital Crude Than Digital Gold
As per the aforementioned study, there is a general upward time trend in bitcoin electricity consumption as well as a strong relationship between bitcoin prices and mining energy consumption.
The article also points out that, on average, each $1 in BTC market value created caused $0.35 in global climate damage, which, as a percentage of market value, falls between the production of beef and the burning of crude oil for gasoline.
WeForum, on the other hand, believes that the crypto industry and Web3 innovations can play critical roles in driving transparent, verifiable, and actionable change toward environmental sustainability in ways that traditional institutions cannot. You might wonder how.
With the recent Merge, Ethereum, the world’s second-largest cryptocurrency, demonstrated that the feat is possible. The digital coin has already begun a technical transition that, once completed, could result in a 99% reduction in the crypto’s carbon emissions.
To give an insight into how the Merge works, picture it as a significant switch to producing Ethereum on energy-efficient computers. The “proof-of-work” mechanism is essentially replaced by the “proof-of-stake” mechanism in this grand update. Maybe BTC could follow suit?