Bitcoin’s energy usage and its “indirect” environmental impact have been a topic of heated discussions, from “humble” beginnings in early forum posts of Satoshi Nakamoto (the pseudonymous creator of Bitcoin), to its eventual culmination as the topic of an entire committee hearing in the US House of Representatives.
As the CoinShares team has emphasized repeatedly: Mining is a topic where “things are often not what they seem.” In their report, The Bitcoin mining Network, Matthew Kimmell and Christopher Bendiksen look into the details of Bitcoin mining, “estimating both power draw and carbon emissions across major countries and regions using a newly developed comprehensive data model.”
As noted in the update from CoinShares, Bitcoin mining uses “approximately 0.05% of the total energy consumed globally.” Bitcoin mining is “responsible for approximately 0.08% of global CO2-equivalent (CO2e) emissions.” BTC mining has “a very small environmental footprint relative to other industries such as Aviation or Marine Transport, and is much smaller than Data Centers and even US domestic Air Conditioners, Electric Fans, and Tumble Dryers.”
The CoinShares report further revealed that mining is “highly beneficial to renewables heavy grids, as demonstrated by its large-scale integration with Texas’ wind-heavy ERCOT grid.”
The carbon footprint of flared and vented natural gas in the US is “enough to completely offset all Bitcoin mining emissions, or even have a positive net emissions impact.”
As noted in the update:
“Contrary to what detractors are trying to claim, Bitcoin uses only approximately 0.05% of global annual energy. Compared to the total of 162,194 TWh consumed globally in 2020, Bitcoin’s total 2021 consumption of 89 TWh is tiny and mounts to nothing more than a rounding error.”
The report added:
“Conversely, its highly sensationalized emissions are also nowhere near what some commentators would like the public to believe. At a net emissions rate of 39 Mt CO2e in 2021, Bitcoin’s total emissions add up to only ~0.08% of the global total emissions of 49,360 Mt CO2e in 2016.”
According to the CoinShares teams, this seems like “a very small price to pay for an open, trustless, censorship-resistant monetary system for the entire world.”
The report also noted that “in the grand scheme of things, the carbon emissions emitted by electricity providers supplying the Bitcoin mining network are inconsequential.”
At 0.08% of global CO2e emissions, “removing the entire mining network from global demand — and thereby depriving hundreds of millions of people of their only hope for a fair and accessible form of money — would not amount to anything more than a rounding error.”
The report concluded:
“Mining provides potentially enormous benefits to renewables-heavy grids and to already producing oil fields with stranded dry gas resources. Any attempt to hinder or restrict Bitcoin mining will not only be detrimental to the hundreds of millions of people, many in the global south, who use Bitcoin as their sole access to banking and financial services, but it risks severely diminishing the ability of our grids to cope with the amount of renewable generation we need to reach our Net Zero Emissions goals.”
You may review the complete report here.