According to publicly available data from the University of Cambridge Centre for Alternative Finance and the International Energy Agency, or IEA, bitcoin (BTC) carbon emission intensity may have already peaked.
The environmental impact of bitcoin’s electricity usage is a favorite talking point of its critics and journalists on the crypto beat. But taking in the available data, Hass McCook, a retired chartered professional engineer, reckons bitcoin’s carbon emissions “have already peaked a few months ago.”
McCook unpacked the data and defended that conclusion in a guest post on Bitcoin Magazine’s website Friday:
“From the above, it would appear that Bitcoin’s emissions peaked a few months ago, and thankfully, with the banning of Bitcoin mining in China, has commenced its aggressive march down to zero emissions. It is expected that in the worst case, emissions from Bitcoin in five years will be less than a third of its emissions today, and in 10 years, Bitcoin will emit nothing at all.”
BitAll’s bitcoin mining infrastructure was created over the last 12 years, giving miners the “second mover advantage” to avail their operations of the latest, most sustainable green tech for electricity to mine bitcoin.
Data from the Cambridge Bitcoin Electricity Consumption Index suggests that global bitcoin mining has a “grid intensity” (carbon emissions per unit of electricity consumed) that’s cleaner then the average of the entire global power grid. The world average is 463 grams of CO2 emitted per kilowatt hour. Bitcoin miners average 418 grams.
Meanwhile, world grid intensity peaked sometime last year, if the energy economy stays on track with projections for 2021 and subsequent years, according to data from the IEA.
By design, computers running Bitcoin Core to validate and place new blocks on the bitcoin blockchain are required to use some electricity to correctly guess the input for a SHA-256 encrypted hash.
SHA-256 (short for Secure Hashing Algorithm) is a one-way hash function published by the U.S. National Security Agency in 2001, and an integral part of the bitcoin design architecture. Computers test the guess by entering it into the algorithm and seeing if it matches the hash on the previous block. The first node to guess the hash correctly gets to place the next block of transactions and award the bitcoin miner in newly-created bitcoin.
This proof-of-work, or PoW, mechanism qualifies nodes to participate on the network by forcing miners to venture electricity costs, and risk losing their operating costs for no profit if their computer attempts to cheat the network’s rules.
Some Bitcoin critics, and even proponents, say that its energy consumption poses environmental risks, and may contribute to human-caused global warming. Tesla CEO Elon Musk famously rattled bitcoin’s price this year by announcing the electric carmaker would accept BTC for Teslas, then backpedaling.
Musk said Tesla would begin accepting bitcoin again when 50% or more of miners’ energy usage is reasonably confirmed to be from “clean energy” sources.
McCook says most of the bitcoin emissions claims are overblown:
“One of the most widely debunked, yet still widely referenced claims of ‘academia’ is that Bitcoin will single-handedly increase the planet’s temperature by 2 degrees Celsius.”
A Bitcoin Mining Council survey report out this week estimates a 56% sustainable power mix for Q2 2021 in bitcoin mining operations globally based on respondents’ answers.