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Nevertheless, at the time, the article’s findings were picked up by the media and triggered an environmental frenzy. One great parallel is when the internet took off in the early 2000s and a Forbes article sounded the alarm, claiming that our digital lives were going to use half of the electric grid - a projection subsequently critiqued and proved to have been too high by at least a factor of four. Studies that have focused on the energy usage projections of widely adopted new technologies have been wrong before. At that rate of growth, the 8 billionth Bitcoin transaction won't be recorded for nearly 14 years, in 2035. Meanwhile, Bitcoin just passed 650 million transactions as of June 1, 2021, a 20% increase from a year before.

As a result, projections for Bitcoin transactions were blown out of proportion the study estimated 8 billion transactions by 2023 in its slowest adoption scenario. In addition, the study assumed that Bitcoin would be adopted at an unprecedented speed, based on the growth trajectories of past technologies.

This year, Bitcoin's electricity requirements have been on the rise while transactions actually decreased. Data shows that energy use remained relatively flat in periods when the number of transactions reached new highs. An increase in transactions does not have a proportional effect on energy consumption. In reality, transactions have no effect on the block difficulty, which is what requires large amounts of computational power to be solved. įor example, the study used the number of Bitcoin transactions to determine the cryptocurrency’s emissions, which should raise an immediate red flag. However, a closer look showed numerous unrealistic assumptions baked into the model, which was eventually debunked by other academic research. The research quickly gained traction in the press and became one of the most cited studies on this issue.

This didn’t stop the widely referenced Mora study, published in 2018, to argue that “projected Bitcoin usage, should it follow the rate of adoption of other broadly adopted technologies, could alone produce enough CO2 emissions to push warming above 2 ☌ within less than three decades.” While there is some data on Bitcoin mining practices, granular information is lacking, which makes it extremely difficult to be confident about emission estimates. The Cambridge Bitcoin Electricity Consumption Index, one of the most-used guesstimates of Bitcoin’s energy use, puts the cryptocurrency’s annualized consumption at around 110 Terawatt-hours (TWh) as of June 1, 2021, which is double compared to the same time frame in 2020, and roughly equivalent to the energy used by the Netherlands.īut translating energy use into carbon emissions is not straightforward in a relatively opaque industry heavily reliant on renewables. Nevertheless, a crucial question remains: In a time when we’re meant to cut down on carbon emissions, why should we be okay with a growing industry of huge data centers that consume vast amounts of energy?īitcoin's heavy use of energy has been at the core of this environmental debate, pushing academic research to try and quantify the cryptocurrency's carbon footprint. Little research has been done to address this gap, and until we can truly understand how much pollution the energy used in Bitcoin mining causes, we won't be able to make it greener. It turns out that many of the most alarming projections rely on questionable methods that overestimate the cryptocurrency’s future energy requirements.

While no one can deny that Bitcoin mining uses a lot of energy, the discussion around Bitcoin’s greenhouse gas emissions has mostly promoted exaggerated narratives in the media, fueled by questionable academic research.Įnergy use and pollution are two different things, and Bitcoin’s greenhouse gas emissions are challenging to quantify. But a closer look shows it might actually be the exact opposite - not using as much energy as advertised, and simultaneously pushing crypto towards a greener future. Bitcoin has been pegged as terrible for the environment, due to its energy-intensive mining facilities all around the globe. Confusion reigns among crypto haters, crypto nerds, environmental do-gooders and the millions of people watching the crypto revolution from afar.