As politicians strive to regulate the cryptocurrency business, Bitcoin (BTC) mining has become the topic of heated discussion over its environmental impact. Critics claim that the method consumes too much energy, adding to climate change.
Why is Bitcoin mining harmful to the environment?
According to a University of New Mexico study, Bitcoin mining has become progressively unsustainable, shifting its sustainable imprint to the negative. Bitcoin mining used 75.4 terawatt hours (TWh) of electricity in 2020, which was more than Portugal (48.4 TWh) or Austria (69.9 TWh) in the same period. Most energy used in Bitcoin mining comes from non-renewable sources such as natural gas, which results in substantial emissions of carbon and air pollutants. However, the environmental impact of Bitcoin mining depends on the greenness of the national power grids that provide the energy.
The study also discovered that CO2 equivalent emissions from Bitcoin mining electrical generation grew 126-fold between 2016 and 2021. In other cases, the climatic damage caused by Bitcoin mining elevated the value of a single Bitcoin, raising worries about the industry’s long-term viability.
Compared to comparable industries, the study found that Bitcoin’s climate losses averaged 35% of its market value between 2016 and 2021. It is slightly less than the damage produced by natural gas and petrol production but more significant than the damage caused by beef production and gold mining.
Bitcoin mining’s changing environment
Despite concerns about Bitcoin’s environmental impact, recent advances indicate that the sector is moving towards a more sustainable future. Following China’s crypto mining crackdown in 2021, many older and less energy-efficient mining rigs were taken offline, and miners began moving to countries with cheaper, typically renewable, energy sources.
This shift has resulted in a reduction in overall power consumption by Bitcoin mining. Bitcoin mining’s widespread energy use has plummeted to around 70 TWh per year or 0.33% of the world’s total electrical generation – nearly half of what it was in May 2021.
The movement of miners to nations such as the United States has also hastened the adoption of more efficient mining rigs, which provide twice the hash power for the same amount of electricity. This change has enhanced the Bitcoin network’s security-to-energy ratio.
Conclusion
While there are real concerns regarding the industry’s reliance on fossil fuels in the past and the energy consumption connected with mining, current trends indicate a more sustainable future. The industry is moving towards more energy-efficient mining rigs and greater dependence on renewable energy sources, which will help to lower Bitcoin’s carbon impact in the long run.