Bitcoin Mining Might Be As Grave As Oil Drilling For Earth

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Bitcoin Mining Might Be As Grave As Oil Drilling For Earth

Bitcoin has come a long way since its inception in 2008, becoming the most popular and valued cryptocurrency of all time. But with time, its inefficiencies were also exposed -- lack of consumer protection leading to money laundering and black market trading. Perhaps the most concerning issue is the huge impact its production has on the environment.

 

Mining Bitcoins could be worse than extracting gold and is as bad as industries related to cattle farming and crude oil. At least that’s what the latest study published in the journal Scientific Reports suggests. The research comes from the University of New Mexico challenging the claims that crypto mining is becoming more sustainable.

"We find no evidence that Bitcoin mining is becoming more sustainable over time," said Professor Benjamin Jones of UNM's economics school. "Rather, our results suggest the opposite: Bitcoin mining is becoming dirtier and more damaging to the climate over time."

Why Is Bitcoin Mining Energy Intensive?

In the race to bring more virtual coins into circulation, more people try to crunch complex math equations. Despite being unregulated, all Bitcoin transactions still need to be verified to curb fraud. This responsibility is given to "miners," who work as auditors by updating a ledger called a blockchain.

This process involves high computing prowess, and cracking the equation first means getting rewarded with a Bitcoin. As the blockchain grows, the calculations get more complex. A whopping 150 quintillion attempts are made every second globally to solve the equation. Crypto farms consume huge amounts of electricity, and one Bitcoin transaction leaves a carbon footprint of 360kg.

 

The researchers hinted that Bitcoin mining is as power-hungry as crude oil drilling and refining, which is among the most harmful industries to the environment. However, unlike crude oil drilling, Bitcoin mining doesn't require expensive equipment.

Consequences Still Unknown

While the researchers agree that the extent of damages done by Bitcoin is yet to be known fully, by categorizing the energy used for mining as a share of the digital currency’s market price they have painted a picture of how grave its environmental impacts could be.

"We find several instances between 2016-2021 where Bitcoin is more damaging to the climate than a single Bitcoin is actually worth," co-author Jones said. "Put differently, Bitcoin mining, in some instances, creates climate damages in excess of a coin’s value."

As per the research, Bitcoin’s electricity consumption has increased by 126 percent, from 0.9 tons per coin in 2016 to 113 per coin in 2021.

With Ethereum, the second most valued cryptocurrency, shifting from power-hungry proof-of-work to proof-of-stake methodology, there might be a great alternative to the huge environmental impacts caused by Bitcoin mining.

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