Bitcoin mining struggles to go green, research shows

A representation of the virtual cryptocurrency Bitcoin is seen in this photo illustration taken October 18, 2021. REUTERS/Edgar Su

LONDON, Sept 27 (Reuters) – Bitcoin is struggling to go green, with the cryptocurrency making only small gains in its use of sustainable energy in the year to January, Cambridge University research showed on Tuesday.

Processing bitcoin transactions and “mining” new tokens is done by powerful computers, connected to a global network, which 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 about its impact on global warming.

Projects have sought ways to move bitcoin mining toward cleaner energy, such as reusing heat byproducts from oil extraction for crypto mining.

Still, fossil fuels accounted for around 62% of bitcoin’s energy mix in January 2022, the latest available data, up from 65% a year earlier, research by the Cambridge Bitcoin Electricity Consumption Index (CBECI) showed.

While coal levels fell to 37% from 47%, bitcoin became more dependent on gas, which in January made up a quarter of the energy mix, up from 16% a year earlier.

The role of sustainable power – classified as nuclear, hydro, wind and solar – in the mix barely increased, reaching around 38% from 35% a year earlier. Hydro fell to 15% from around 20%.

Bitcoin mining is largely unregulated and opaque, with few centralized bodies collecting data. The Cambridge study was based on data on the geographical spread of mining around the world and the energy mix of individual countries.

The report said their findings “differ markedly” from estimates by US-based industry body the Bitcoin Mining Council which in July put the share of sustainable energy in bitcoin’s power mix at around 60%.

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

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

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