What is the ecological impact of producing cryptocurrency?

This text is taken from the Courrier de la Planète of October 25, 2022. To subscribe, click here.

To answer this question posed by a reader, Irène Cinq-Mars: bitcoin, the most famous and controversial cryptocurrency, would have an impact on the climate similar to that of some of the most harmful industries for the environment, according to a recent study published in the scientific journal Scientific Reports in September.

Bitcoin and the technology behind cryptocurrencies, the blockchain, have long been known to be very energy-intensive, but the authors of the publication, researchers from the University of New Mexico, take a fresh look at its environmental footprint. They calculated the climate damage associated with the production of each bitcoin.

Result: these amounted to more than $11,300 in 2021, according to their estimates based on the economic costs of carbon dioxide emissions. The researchers then wanted to compare the climate damage of bitcoin production based on the ratio of its market value.

Averaged from 2016 to 2021, the weather damage from each bitcoin produced amounted to around 35% of its market value, they revealed. In other words, the pollution generated by the production of bitcoins would be compared, all things considered, to that generated by the production of beef (33%) or oil (41%).

British researchers have also ventured to estimate the environmental impact of the Bitcoin network. Currently, Cambridge University’s Center for Alternative Finance (CCAF) estimates the annual consumption of the Bitcoin network to reach 104.5 TWh (terawatt hour) — slightly lower than in the Netherlands (116.3 TWh). ), but higher than that of Belgium (83.7 TWh). In fact, if bitcoin were a country, it would rank as the 33rd largest consumer of electricity in the world. And why does bitcoin consume so much electricity? Because all over the planet, computers are « mining » bitcoins and verifying transactions on the network.

As of January 2022, the sources of electricity used to power this network were mostly non-renewable (73%, or nearly three-quarters), according to the CCAF. This is proof that, if cryptocurrencies are virtual, their effects on the climate are… very real.

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