In proportion to the market price, the environmental costs of mining the cryptocurrency Bitcoin are more comparable to the damages of producing cow meat than those of gold mining.
The authors of an analysis published in the journal Scientific Reports They suggest that rather than be viewed as “digital gold,” Bitcoin should be compared to much more energy-intensive products such as beef, natural gas, and fuel. Raw oil.
As of December 2021, Bitcoin had a market value of approximately $960 billion, with a global market share of approximately 41% among the cryptocurrencies.
Although it is known to be energy intensive, the extent of the effects is unclear. weather damage of Bitcoin, that is, estimates of the financial damages of carbon emissions and the impact of climate change on economies.
Scientist Benjamin Jones and his colleagues made economic estimates of climate damage from the bitcoin mining between January 2016 and December 2021 and report that in 2020 Bitcoin mining used 75.4 terawatt hours per year (TWhyear-1), higher energy use than Austria (69.9 TWhyear-1) or Portugal (48.4 TWhyear-1). 1).
The authors assessed Bitcoin’s climate damage based on three sustainability criteria: whether the estimated climate damage increases over time; If the market price of Bitcoin exceeds the Economic cost of climatic damage; and how climate damages per mined currency compare to climate damages from other sectors and commodities.
They found that energy emissions from Bitcoin mining have increased 126-fold, from 0.9 tons of emissions per coin in 2016 to 113 tons per coin in 2021. Calculations suggest that each Bitcoin mined in 2021 generated $11,314 in climate damage, with total global damage exceeding $12 billion, 25% of the price of climate change. market. Damage peaked at 156% of the coin price in May 2020, suggesting that every dollar of Bitcoin market value led to $1.56 in global climate damage.
Lastly, the authors compared the climate damage of Bitcoin with that of other industries and products such as electricity generation, crude oil processing, agricultural meat production, and agriculture. mining of precious metals. Bitcoin weather damages stood at an average of 35% of its market value between 2016 and 2021. This was less than weather damages compared to the market value of electricity produced by natural gas (46%) and the gasoline produced from crude oil (41%), but more than those from beef production (33%) and gold mining (4%).