Attacks on Bitcoin (BTC) are unabated even in the midst of a bear market as more research questions energy use and its impact on the environment.
The latest research paper by researchers from the University of New Mexico Department of Economics, published on September 29, claims that when it comes to climate damage, bitcoin acts more like “digital oil” than “digital gold.”
The study attempts to assess the energy-related climate damage of bitcoin mining for Proof of Work (PoW) and make comparisons with other industries. It claims that, on average, between 2016 and 2021, every dollar of bitcoin market capitalization generated $0.35 of “global climate damage,” adding:
“Which is considered a fraction of the market value in the area between beef production and crude oil burned as gasoline, and an order of magnitude greater than wind and solar energy.”
The researchers concluded that the results represent “a set of red flags for any assessment as a sustainable sector”, adding that the Bitcoin network is unlikely to become sustainable by moving to Proof of Stake:
“Unless the industry changes its production trajectory from POW or moves to the point of sale, this category of digitally scarce goods may need to be regulated, and delays are likely to increase global climate damage.”
Recently, Lachlan Feeney, founder and CEO of Australian blockchain development agency Labrys, told Cointelegraph after the merger that he was “pushing” Bitcoin to justify a PoW system in the long term.
There are always comparisons and counterarguments. The University of Cambridge currently reports that the Bitcoin network currently consumes 94 terawatt hours (TWh) per year. In comparison, all refrigerators in the US alone use more than the entire BTC network, at a rate of 104 TWh per year.
Also, transmission and distribution losses in the US alone amount to 206 TWh per year, potentially increasing the capacity of the Bitcoin network by 2.2 times. Cambridge also reported that demand for Bitcoin network power has fallen 28% since mid-June. This is likely due to concessions by miners during the bear market and the introduction of more efficient mining equipment.
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There is also an argument that more mining is currently being done using renewable energy, especially in the US, which has seen an influx of mining companies since China’s ban.
Earlier this month, former MicroStrategy CEO Michael Saylor criticized “misinformation and propaganda” regarding the power consumption of the Bitcoin network. He noted that indicators show that nearly 60% of the energy used in bitcoin mining comes from sustainable sources, and energy efficiency has increased by 46% compared to last year.
Texas, which has emerged as a mining hub in recent years, is one example of a renewable energy source – it is the largest producer of wind power in the United States. Many mining operations have also been organized to take advantage of excess or wasted energy such as gas flaring. In August, Cointelegraph also reported that the sustainable energy use of BTC mining has grown by nearly 60% in one year, so it’s not all doom and gloom.