The energy consumed between 2016 and 2021 to produce bitcoin, the most important cryptocurrency, had a social and environmental impact comparable to that of beef production and nine times greater than gold mining, a non-virtual competitor, according to a study published Thursday, September 29 by Scientific Reports.
The article, published in the journal of the Nature group, is based on the concept of “social cost of carbon“, a method that quantifies the negative effects (health, economic and environmental) of the emission into the atmosphere of one tonne of CO2 or equivalent.
With this method, which is spreading in the evaluation of the fight against climate change and its consequences, the cost of a ton of CO2 is estimated between 50 and 185 dollars, according to different expert assumptions.
The authors, assuming a cost of $100 per ton, “estimate that each bitcoin produced in 2021 generated $11,314 in climate damage, with total global damage exceeding $12 billion” since 2016, or 25% of the total market value of this cryptocurrency.
Over the period 2016-2021, this social cost of bitcoin production represented on average 35% of the market value of the cryptocurrency. In other words, a dollar of bitcoin produced had a social cost of 35 cents.
A cost comparable to that of beef production (33%), lower than that of electricity generated from natural gas (46%) and much higher than gold mining (4%).
“Our results suggest that bitcoin production poses real sustainability issues“, Benjamin Jones, main author, told AFP.
Climate damage exceeds the value of a bitcoin created
“Bitcoin production is increasingly bad for the climate over time (on average)“, he pointed out. The study notes that “energy emissions from bitcoin mining have increased 126 times, from 0.9 tonnes of emissions per coin in 2016 to 113 tonnes per coin in 2021“.
Otherwise, “this production is sometimes “submerged”, which means that its climatic damage exceeds the value of a bitcoin created“, he explained.
Indeed, before the price explosion during the year 2020, “bitcoin climate damage exceeded the price of coins sold“for nearly four months that year, reaching”a 156% peak in coin prices in May 2020“, according to the study.
“From a climate damage perspective, bitcoin turns out to be ‘digital crude oil’ rather than the ‘digital gold’ touted by its proponents“, write the authors.
Ether, the second cryptocurrency behind bitcoin, for its part carried out a radical change in its mode of operation in mid-September, supposed to reduce its electricity consumption by 99%.