Even in the depths bear markets, the Bitcoin ( BitcoinTC ) bashing continues unabated. More research is being done to question its energy consumption and impact on the environment. Researchers say that Bitcoin mining raises “red flags” for anyone considering it a sustainable industry.
The University of New Mexico’s department of economics published a new paper on September 29th. claims that Bitcoin behaves more like “digital oil” than “digital money.
This research attempts to determine the climate-related damage that proof-of-work (PoW), Bitcoin mining has caused and compare it to other industries.
The research claims that every $1.00 in BTC market value generated was responsible for $0.35 global “climate damages” between 2016-2021.
“Which is a market share equal to beef production or crude oil used as gasoline and an order of magnitude higher than wind power and solar power?”
Researchers conclude that these findings are “a set of red flags” for any consideration as a sustainability sector. They also note that it is unlikely that Bitcoin will be able to sustain itself by moving to proof-of stake.
If the industry does not shift its production away from POW or move to POS, this class of digitally rare goods may need regulation. Delay will likely lead to increased global climate damages.”
After the Merge, Lachlan Feeney (founder and CEO of Labrys, an Australian-based blockchain development agency) told Cointelegraph that the “pressure is on” Bitcoin to justify the PoW system in the long term.
However, there are always counter arguments and comparisons. According to the University of Cambridge, the Bitcoin network consumes 94 Terawatt Hours (TWh) annually. This is because all the refrigerators in the United States consume more than the entire BTC network, which is 104 TWh annually.
Additionally, the U.S. transmission and distribution electricity loss is 206 TWh per annum, which could provide enough power to power Bitcoin networks 2.2 times. Cambridge also reported that the Bitcoin network’s power demand has declined by 28% in the period between June and July. This could be due to miners’ capitulations in the bear market, and newer mining hardware.
You can also argue that more mining now uses renewable energy, particularly in the United States which has seen an increase in mining companies since China’s ban.
An ex-CEO of MicroStrategy Michael Saylor lashed out at “misinformation” and “propaganda” about the energy consumption of the Bitcoin network. He noted that almost 60% of the energy used for Bitcoin mining is from renewable sources, and that energy efficiency has improved 46% year-on-year.
Texas has been a mining capital in recent years and is now the country’s largest producer of wind energy. Many mining operations are also set up to make use of other wasted energy, such as gas flaring. Cointelegraph reported in August that sustainable energy usage for BTC-mining has increased by nearly 60% in one year. This is good news, but it’s not all doom.