Heated discussions have given rise to talk on the internet about the agenda; but a study indicates that the impacts are much smaller than many imagine.
Recently, several projects have faced problems when implementing blockchain technologies due to pressure from users. Some claim that the impacts that cryptocurrencies have on the environment are immeasurable, so their use should be avoided.
ArtStation, a marketplace created for digital artists, canceled its non-fungible tokens (NFTs) platform within hours of its announcement. According to the company, many users were against the initiative, as they believe it would be “ecologically unethical”.
Some artists did publications against the use of technology, saying it is a “pyramid scheme” and “an environmental nightmare”.
Anyway: are cryptocurrencies really that bad for the environment? Or is it all just a big exaggeration?
One study, titled “Comparing Bitcoin’s Environmental Impact…”, was released by Hass McCook in April 2021. Bitcoin’s environmental impacts were compared to gold mining and institutions. traditional banking.
According to the author, “Bitcoin energy consumption and its environmental impact is a subject that is regularly discussed, but rarely understood”. Their consumption is often compared to small nations or other meaningless comparisons. “Critics are not even able to separate “energy use” from “electricity use”, he added.
About a billion people do not have access to the electric grid, but make good use of physical fuels. According to the study, of the 160,000 TWh generated annually, about 50,000 TWh are wasted due to inefficiency; half of the wasted value is grid related.
According to the graph below, most of the electricity production in the world is related to the burning of coal, followed by gas and hydropower.
Gold mining in 2020 produced 20 tonnes of carbon dioxide (CO2) and consumed 48.6 MWh of energy – and part of the numbers are omitted due to data limitations. One study from the University of DePaul believes that the emission of CO2 is around 35 tons per year.
Furthermore, the activity would consume around 79.9MWh for mining and refining, while recycling gold would produce 37 tonnes of CO2 and consume 31.3 MWh of energy.
As a result, the gold industry consumes a total of 265 TWh to function, in addition to 145 metric tons of CO2 in the atmosphere.
McCook released a paper in 2014 about energy consumption linked to banking institutions; At the time, an approximate annual consumption of 660 TWh was calculated to support banking systems, ATMs, issuing banknotes, coins, etc.
However, nowadays, it is possible to say that consumption is around 700 TWh, in addition to the emission of 400 metric tons of CO2 – according to conservative calculations.
McCook says he makes comfortable use of Cambridge Bitcoin Electricity Consumption Index, a web platform that monitors the electricity consumption of cryptocurrency in a very updated way.
According to the platform, Bitcoin uses 113 TWh of energy annually. Although there is no information regarding the use of renewable energy, high grid consumption naturally forces miners to seek more affordable sources of energy – and renewables tend to be the best options.
According to the global calculation of 0.6 tonnes of CO2 per kWh produced, Bitcoin mining emits around 70 tonnes of carbon dioxide annually.
Contrary to what many afflicted minds believe, Bitcoin causes less than half the pollution that gold mining provides, in addition to consuming much less energy.
Compared to traditional banking institutions, Bitcoin’s energy consumption and emission of pollutants are less than 20%.
In summary, Bitcoin is not the real villain of this story, but the centralizing institutions and government approval to function normally – albeit at the expense of life on Earth.