Bitcoin much more harmful than thought: gold and petrol over

Bitcoin is even more harmful than you probably thought. New research puts a price tag on the damage caused by the cryptocurrency, comparing that damage to that of gold, among others.

The initial hype surrounding Bitcoin was huge. From Twitter to De Wereld Draait Door: who didn’t want to get rich quick? It would change the world. How to pay for an ice cream, how to buy a house.

Bitcoin beats beef industry

fast forward, and it’s suddenly 2022. Bitcoin is still huge, but the almost blind and ubiquitous enthusiasm seems to be a thing of the past. If the cryptocurrency is in the news at all, it is often because of the negative consequences of the tech.

We have known for a long time that Bitcoin is not too good for the climate. Rarely, however, have those consequences been made so tangible as they are now. In the scientific journal Scientific Reports has published a new study that puts a price tag on the damage caused by the cryptocurrency.

What seems? Bitcoin is just as damaging to our planet as notorious industries such as beef production and the burning of crude oil. In numbers, every dollar of market value in Bitcoin generated 35 cents of global climate damage between 2016 and 2021.

In comparison, the beef industry was responsible for 33 cents in the same period. Petrol? 41 cents. Another interesting comparison is that with gold. Bitcoin is often referred to as the new gold.

Much more harmful than gold

This research makes it clear that the cryptocurrency is really losing out to gold in an important area. Bitcoin was 8.75 times more harmful to the environment between 2016 and 2021.

“Compared to mining gold, Bitcoin’s share of climate damage is almost an order of magnitude higher,” Andrew Goodkind told The Verge. He is co-author of the research and assistant professor of economics at the University of New Mexico.

For their study, the researchers looked at ‘the social costs of carbon’. Factors such as losses in agricultural and labor productivity and indirect damage caused by rising sea levels are therefore also taken into account.

Bitcoin fortune ends up in landfill, but its owner has a plan

The damage at a glance (Image: Nature)

More complete picture of climate damage

It provides a much more complete picture than simply comparing Bitcoin’s energy consumption with that of certain countries, for example. An often made comparison, but then you ignore a large part of the damage that the crypto causes.

If you do look at that complete picture, a confronting number will appear at the bottom of the line. The researchers estimate that Bitcoin’s total climate damage was $12 billion worldwide between 2016 and 2021.

There is still much disagreement about the exact price tag that should be attached to the social costs of carbon. The researchers used $100 a ton, but some governments use $51 a ton in their calculations, for example. Either way, you always end up with huge amounts at the bottom of the line.

Ethereum Offers Hope for Bitcoin

Is there still hope then? Secure. Ethereum, Bitcoin’s biggest competitor, recently received a massive update that drastically reduces the energy consumption of the technology.

Goodkind, co-author of the study, points in that direction as well: “If Bitcoin were to receive a similar update, the climate damage estimated in this work would likely become negligible.”

Want to learn more about the team’s measurement methods and the impact of Bitcoin on the planet? You can read their full research here. A surprisingly educational and fascinating read!

Seen a mistake? Mail us. We are grateful to you.

NatureThe Verge

Reply to article:

New research hangs price tag on climate damage Bitcoin

The article is in Dutch

Tags: Bitcoin harmful thought gold petrol

NEXT Sending tax bills is running at full speed: almost 2.3 million Belgians are already getting money back from the tax authorities