Emissions from mining cryptocurrencies have skyrocketed, researchers reported in Scientific Reports. The carbon footprint of mining one Bitcoin multiplied 126 times from 2016 to 2021. In that window, Bitcoin mining caused an estimated $12 billion in global climate damage.
“We find no evidence that Bitcoin mining is becoming more sustainable over time,” said Benjamin Jones, an economist at the University of New Mexico. “Rather, our results suggest the opposite: Bitcoin mining is becoming dirtier and more damaging to the climate.”
The computing power needed to mine Bitcoin, by far the world’s most valuable cryptocurrency, is sourced mostly from coal and natural gas. Bitcoin in 2020 used 75.4 TWh of electricity — more than the country of Austria.
According to research by the Jones team on Bitcoin’s electricity demand from 2016 to 2021, an average of 113 metric tonnes of CO2 were emitted in 2021, compared to 0.9 metric tonnes in 2016.
Assuming $100 of environmental damage per metric tonnes of CO2, each Bitcoin mined in 2021 caused over $11,300 of climate damage.
The trend arises from Bitcoin’s “proof-of-work” mining system. As more miners enter the fray and compete with more powerful computers, electricity usage rises sharply. To prevent these miners from generating new Bitcoins too quickly and reducing their value, an algorithm raises the difficulty of the mining puzzles that require more electricity to be solved.
Experts expect climate damage to continue as long as fossil fuels like coal remain cheap, especially given recent drops in Bitcoin’s value. The cryptocurrency fell from an all-time high of almost $69,000 per coin in November 2021 to just over $16,500 per coin a year later.
“Miners will start going from renewable energy to dirty energy, to coal power, just to increase their profit margin,” said Larisa Yarovaya, a finance professor at the University of Southampton, UK.
Offsetting climate damage of mining one Bitcoin would cost about 35% of the coin’s value. By this standard, Bitcoin ranks alongside unsustainable products like crude oil and beef.