Bitcoin Makes Slim Gains in Use of Sustainable Energy, Cambridge University Research Shows

Bitcoin is struggling to go green, with the cryptocurrency making only slim gains in its usage of sustainable energy in the year to January, research by Cambridge university showed on Tuesday.

Processing Bitcoin transactions and “mining” new tokens is done by powerful computers, hooked up to a global network, that compete against others to solve complex mathematical puzzles.

The process guzzles electricity, with its heavy reliance on polluting fossil fuels such as coal drawing criticism from policymakers, investors and environmentalists who worry over its impact on global warming.

Projects have sought ways to shift Bitcoin mining towards cleaner energy, such as repurposing heat byproducts from oil extraction for crypto mining.

Yet fossil fuels made up some 62 percent of Bitcoin’s energy mix in January 2022, the latest data available, versus 65 percent a year earlier, the research by the Cambridge Bitcoin Electricity Consumption Index (CBECI) showed.

While the level of coal fell to 37 percent from 47 percent Bitcoin became more reliant on gas, which in January accounted for a quarter of its energy mix versus 16 percent a year earlier.

The role of sustainable power — classed as nuclear, hydro, wind and solar — in the mix barely rose, hitting about 38 percent from 35 percent a year earlier. Hydro dropped to 15 percent from around 20 percent.

Bitcoin mining is mostly unregulated and opaque, with few centralised bodies gathering data. The Cambridge study was based on data on the geographical spread of mining across the world and the energy mix of individual countries.

The report said its findings “noticeably deviate” from estimates by the US-based Bitcoin Mining Council industry body that in July put the share of sustainable energy in Bitcoin’s power mix at about 60 percent.

“We are trying to show what Bitcoin’s footprint is,” said CBECI lead Alexander Neumueller. “The energy mix really has a strong impact on greenhouse gas emissions.”

Bitcoin’s greenhouse gas emissions are set to hit 48.4 million tonnes of carbon dioxide equivalent this year, some 14 percent lower than the estimated emissions for 2021, CBECI said.

© Thomson Reuters 2022