According to publicly available data from the University of Cambridge’s Center for Alternative Finance and the International Energy Agency (IEA), Bitcoin’s (BTC) carbon emission intensity may have already peaked.
The environmental impact of Bitcoin’s power consumption is a popular topic of conversation among its critics and journalists over the crypto beat. But given the available data, Hass McCook, a retired, federally recognized professional engineer, believes Bitcoin’s carbon emissions “peaked a few months ago.”
McCook unpacked the data and defended that conclusion in a guest post on the Bitcoin Magazine website on Friday:
“From the above, it appears that Bitcoin emissions peaked a few months ago and fortunately, with the Bitcoin mining ban in China, it began its aggressive march to zero emissions. It is expected that in the worst case, Bitcoin emissions will be less than a third of its current emissions five years from now, and Bitcoin will not emit anything at all in 10 years. “
BitAll’s bitcoin mining infrastructure was created over the past 12 years, giving miners the “second mover advantage” to use the latest, most sustainable green technology to power their bitcoin mining power.
Data from the Cambridge Bitcoin Electricity Consumption Index suggest that global bitcoin mining has a “grid intensity” (carbon emissions per unit of electricity consumed) that is cleaner than the average of the entire global electricity grid. The global average is 463 grams of CO2 per kilowatt hour. Bitcoin miners averaged 418 grams.
Meanwhile, global grid intensity peaked sometime last year if, according to the IEA, the energy industry stays on the right track with its forecasts for 2021 and the following years.
Computers running Bitcoin Core to validate and place new blocks on the Bitcoin blockchain need to use some power 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 US National Security Agency in 2001 and is an integral part of the Bitcoin design architecture. Computers test the guess by entering it into the algorithm and see if it matches the hash in the previous block. The first node to guess the hash correctly is allowed to place the next transaction block and assign the bitcoin miner in newly created bitcoin.
This proof-of-work, or PoW, mechanism qualifies nodes to join the network by forcing miners to risk electricity bills and risk losing their running costs to no profit if their computer tries to cheat the network’s rules.
Some critics and even proponents of Bitcoin say that its energy use poses environmental risks and can contribute to human-made global warming. Elon Musk, CEO of Tesla, is known to have messed up Bitcoin price this year by announcing that the electric car maker would accept BTC for Tesla and then step down.
Musk said Tesla would accept Bitcoin again if it is confirmed that 50% or more of miners’ energy use comes from “clean energy sources.”
McCook says most of the claims about Bitcoin emissions are exaggerated:
“One of the most widely debunked, but still widely used, claims by the ‘Academy’ is that Bitcoin will single-handedly raise the temperature of the planet by 2 degrees Celsius.”
A survey report published this week by the Bitcoin Mining Council estimates a sustainable electricity mix of 56% for the second quarter of 2021 in Bitcoin mining operations worldwide based on respondents’ responses.