Mainstream media and some politicians are painting Bitcoin as a major contributor to climate change. They are pointing out that this magic internet money whose use is still lost on them is destroying the planet with its power-hungry networks of mining rigs. However, a climate tech investor and environmental campaigner went on a mission to find the truth. Daniel Batten found out that data being used to demonize the king of crypto is outdated and missing some crucial information.
Let us check what he found out and decide for ourselves if Bitcoin is worsening climate change or if it is the solution we have been looking for.
Why is Bitcoin Being Pictured as a Contributor to Environmental Damage
First, we need to understand how Bitcoin works. It allows the transfer of value without the need for a third party or central authority. It uses a public ledger, AKA blockchain, which is secured by a network of specialized computers or mining rigs. These miners receive Bitcoin in exchange for its services. Unfortunately, these mining rigs use up a lot of power.
According to Statista, Bitcoin uses more than 136 TWh per year. For context, this is the consumption of big countries like Argentina or The United Arab Emirates.
The numbers are big, but we have to remember that not all energy consumption are the same. We have to consider the source of energy. We have to ask if the energy is coming from fossil fuels or renewable energy sources.
Daniel Batten Played Detective
In Batten’s quest for the truth, he noticed something. Despite Bitcoin being an innovative tool, mainstream media is focusing on its perceived harm to the environment. According to reports:
- Bitcoin contributes up to 62 metric tons of CO2 emission annually.
- Its emission intensity is increasing.
- It mainly gets its power from coal – considered to be one of the dirtiest energy sources.
Batten postulated that all this information came from somewhere and he found out that these allegations were based on a study coming from the University of Cambridge. He said that the study is not updated since the data is only up to January 2022.
Data from 2022 might still sound like “a bit updated”, however, during the period Kazakhstan still held more than 13% of the global hash rate. As of October 2023, it only holds 0.73%. This is big because Kazakhstan mainly gets its power from coal and oil.
He also found out that the Cambridge study did not include off-gird BTC mining, which means they don’t get their power from the host country’s electrical grid. Here is where it gets interesting. Batten found out that 28% of the global hash rate is being handled by off-grid miners, who use 80% sustainable energy.
Batten’s research and modeling are more accurate, that even Bloomberg Intelligence attested to its accuracy.
Bitcoin is Green
There are several takeaways from Batten’s research and it all points to the fact that Bitcoin is not destroying the environment, but rather is a tool to save it.
- Half of Bitcoin’s power is from sustainable sources. In fact, it is the largest user of sustainable energy in the world.
- Bitcoin mining emission has not grown in the last 4-year cycle. The network is growing, but the emissions stayed flat.
- Its mining emission intensity is lower compared to other industries in the world, including the gold and banking industries
- Bitcoin’s biggest energy source is hydro.
The Data has Spoken
Daniel Batten is known for his data-driven approach to Bitcoin mining research. His hometown in New Zealand was affected by a huge typhoon, that is attributed to climate change. This experience is driving his desire to get to the truth. It also contributes to his advocacy as a climate tech investor.
Just maybe, politicians and mainstream media should use his research to look at the real score. Instead of blaming Bitcoin for what is happening to our planet, maybe they should consider it as a tool to solve our problem.
Bitcoin was indeed created to empower the common person so that finance will not be dominated by an elite few. However, it can also help solve our environmental crisis. Have you wondered what is the carbon emission of going to the bank just to make a transaction? What is the carbon emission of maintaining big bank offices? Gold mining is harsh on the environment, yet we need it because it is a store of value – however, we now have an alternative.
So, Bitcoin can replace several industries, which in turn can save tons of carbon emissions. Data is also showing us that Bitcoin mining has not increased for quite some time and the energy source is predominantly from renewables and increasing.
The data has spoken. We have the innovative and greenest financial asset. It is up to you if you want to use it.
The information presented in this article is for informational purposes only and should not be construed as financial advice. This article does not constitute an offer to buy or sell any financial instruments, or a solicitation to engage in any investment activity. Investing involves risk, and you could lose money. You should consult with a qualified financial professional before making any investment decisions.
