Why bitcoin mining struggles to go green
STORY: Bitcoin is struggling to go green.
(Tom Wilson, Cryptocurrency correspondent) "The global network creates about the same amount of carbon emissions as the entire country of Greece.’’
New research from the University of Cambridge shows the world's largest cryptocurrency has only made slim gains in its usage of sustainable energy in the year to January 2022.
So why is it that?
And is bitcoin's carbon footprint likely to improve?
Processing bitcoin transactions and "mining" new tokens uses a lot of energy.
Reuters cryptocurrency correspondent Tom Wilson explains.
‘‘Making new bitcoin is a process called mining, and it's incredibly energy intensive. It uses really powerful computers which are hooked up across a global network, and they'll fight against each other to solve very difficult math problems, to create a new bitcoin. Doing that uses very powerful computers and therefore a huge amount of electricity.
The process relies heavily on polluting fossil fuels such as coal,
drawing criticism from policymakers, investors and environmentalists who worry over its impact on global warming.
In response, the industry has tried to find ways to shift bitcoin mining towards cleaner energy.
"Over the last couple of years, the Bitcoin mining industry has tried really hard to come up with ways to make bitcoin mining greener. Some people have tried to use byproducts from traditional mining, such as flare gas. Other people have tried to shift bitcoin mining towards renewable sources of power like hydroelectric.''
Despite these efforts, research by the Cambridge Bitcoin Electricity Consumption Index showed that fossil fuels still made up some 62% of bitcoin's energy mix in January 2022 versus 65% a year earlier.
While the level of coal fell from 47% to 37%
bitcoin became more reliant on gas,
which in January accounted for a quarter of its energy mix versus 16% a year earlier.
The role of sustainable power - classed as nuclear, hydro, wind and solar - barely rose, hitting about 38% from 35% a year earlier.
Hydro dropped to 15% from around 20%.
Bitcoin mining is mostly unregulated and opaque, with few centralized bodies gathering data.
The Cambridge study is based on data on the geographical spread of mining across the world and the energy mix of individual countries.
Bitcoin's greenhouse gas emissions are set to hit more than 53 million tons of carbon dioxide equivalent in 2022.
‘’Lots of investors are still pretty skeptical about bitcoin because of its environmental impact. There are still lots of initiatives in place to try to make Bitcoin go greener. But unless there is a really radical breakthrough in the underlying computer code that Bitcoin is based on, it's still quite difficult to see exactly how it can switch to a greener energy mix. So in short, Bitcoin mining still has a bit of a green problem that it's trying to solve.’’