OVIEDO, Spain
Bitcoin mining in 2020 was powered by 7. 8% more electricity than the entire Austrian country and 55. 8% more than Portugal’s total, according to an article published Thursday in Nature.
Bitcoin proponents have claimed that the cryptocurrency is “digital gold” because it is destined to become the ultimate store of value, while the authors of the Nature study recommend that Bitcoin, which is based on the energy-intensive “proof-of-work” system, is more akin to “digital crude” due to its huge environmental costs.
In 2021, new bitcoin resulted in an average of $11,314 in weather damage, and overall damage from all coins mined that year exceeded $3. 7 billion, according to the study.
Overall, every dollar of Bitcoin’s market price guilty of $0. 35 in the global climate suffered from 2016 to 2021, according to the study. In terms of market price, this is between meat production and crude oil used as gasoline.
The researchers also said that as the industry matures, new mined Bitcoin causes more and more weather damage. In 2020-2021, both the dollar value of bitcoin and both caused $0. 58 in weather damage.
The authors explained that the accumulation of energy consumption is partly due to the fact that Bitcoin miners compete with an ever-increasing amount of computing power.
In the “proof of work” formula used in Bitcoin, miners determine transactions on the blockchain by resolving a unique transaction number. Those who crack the code first are rewarded in a “win-win take-all formula,” so miners will have to use rugged computing devices to remain competitive.
It is estimated that most of the electrical energy used to mine Bitcoins comes from non-renewable sources. Beijing’s 2021 ban on crypto mining made this even more true since much of the electrical energy used in China came from hydropower.
But the study’s authors found that even if miners increased their use of renewable energy by 50 percent, mining would still cause “significant and developing climate damage. “, to gold mining.
While the authors cautioned that blockchain generation can still be useful for innovation, they also moved to a “proof-of-stake” system, which was what made this month the second-largest allocation of Ethereum blockchains.
“If the industry doesn’t replace its production direction away from proof of work. . . So this class of rare virtual goods would probably want to be regulated, and a delay will likely lead to a buildup of global climate damage. “” the authors concluded.