According to an estimate by researchers at the Cambridge Center for Alternative Finance, the mining of the cryptocurrency Bitcoin is responsible for 0.1 percent of global CO₂ emissions. However, the researchers assume that emissions have recently fallen: they forecast emissions of 48.35 million tonnes of carbon dioxide equivalents for the whole of 2022 – that would be 14.1 percent less than in 2021 (56.29 million tons of carbon dioxide equivalent). The emissions in 2022 would then roughly correspond to those of countries like Nepal or the Central African Republic.
The Cambridge scientists see the reason for the drop in greenhouse gas emissions in the fact that mining for Bitcoin has become less profitable. This is forcing miners to take their hardware off the grid and save on electricity bills, given a bitcoin price currently hovering around $20,000. Electricity consumption fell by about 1.1 percent year-on-year, from 96.48 TWh to 95.42 TWh.
Hashrate further increased
Recently, the Bitcoin mining industry in the USA also made significant losses, and the prices of listed companies are in the basement. Compute North, a prospecting hosting service, filed for bankruptcy last week with $500 million in debt. Whether other companies will follow is the subject of numerous speculations.
At the same time, however, the prospecting performance has increased – the researchers assume that old hardware will be replaced with new, more efficient devices. Between January 2021 and September there was an increase of around 75 percent from 137.76 exahashes per second to 242.13 exahashes per second.
Not so great with the climate
According to data from January 2022, fossil fuels are clearly ahead in the energy mix that provides the prospecting stream. 62.4 percent of the electricity came from these sources, while only 37.6 percent came from climate-friendly power generation, which the researchers also include nuclear power. The largest source of electricity is coal with 36.6 percent. Hydropower is the most important contributor to renewable energies with almost 15 percent. Because many mining operators have relocated their plants from China to the USA or Kazakhstan, the shares of energy sources have also shifted, which can be seen, among other things, in the reduced share of hydropower.
The researchers point out that their results in estimating the energy mix differ significantly from those of the bitcoin mining industry. With a share of almost 60 percent renewable energies, they imagine themselves to be significantly greener. However, one is dependent on publicly available data for the theoretical model for the ecological footprint of bitcoin. Cases such as power generation in stand-alone systems or the use of flare gas, a waste product from oil production that is often only burned, would not be included.
It is estimated that the Bitcoin network emitted around 200 million tons of carbon dioxide equivalents from the creation of its first block in 2009 until September 2022. 92 percent of it was blown into the atmosphere from 2018. For comparison: According to figures from the Federal Environment Agency, Germany’s emissions in 2021 were 762 million tonnes of carbon dioxide equivalents.
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