Last year, Bitcoin – a cryptocurrency network that uses proof-of-work (PoW) to process transactions and protect protocols – received a lot of criticism for its environmental impact. This week, cryptocurrency firm Coinshares released a report showing that the talking points decrying the network's power usage have been greatly exaggerated. According to Coinshares, Bitcoin's mining infrastructure accounts for 0.08% of the world's carbon dioxide (CO2) production today.

Despite ESG Criticism, Research Shows "Bitcoin Mining is an Energy Sink" and Consumes Less Energy than Banking

There is a lot of opposition from those who wholeheartedly believe that the Bitcoin network is bad for the environment. Many decry Bitcoin's PoW because they believe it takes too much energy to keep the network running strong. Although, critics never discuss the energy consumption of the dollar and how it is enforced by state violence. Critics also make use of extremely biased and inaccurate data from the Digiconomist website. For example, the portal is run by Alex de Vries, an employee of De Nederlandsche Bank NV (DNB).

Despite the cherry-picking of critics, numerous reports have shown that Bitcoin's energy consumption is far lower than that of alternative financial systems. In May 2021, Galaxy Digital published a study on the energy consumption of bitcoin mining, finding that it is far less than the energy consumed by the gold or silver industries. Galaxy Digital also describes how companies such as Great American Mining, Upstream Data, and Crusoe Energy Systems are harnessing methane emissions by converting waste flare gas into expendable energy. Galaxy Digital's study notes.

Bitcoin mining is the ideal energy receiver: anyone, anywhere can monetize excess energy by plugging in the device and turning it off at their convenience. An example of bitcoin mining as an energy sink is in oil fields, thus directly reducing methane emissions.

Coinshares: "Once Our Power Generation Is 100% Renewable, Bitcoin Will Be 100% Renewable"

This week, Coinshares released its Bitcoin Mining Report, a study that provides the latest data on the state of the Bitcoin mining industry and environmental, social and governance (ESG) issues. The Coinshares report estimates that the Bitcoin protocol emits 42 trillion tons of CO2 in 2021.

K-line chart from Coinshares 2022 Bitcoin Mining Report.

The study highlights that the total emissions of the planet in 2019 are 49,360 Mt CO In addition to the network's mining infrastructure accounting for 0.08% of global CO2 emissions, Bitcoin's energy consumption accounts for 0.05% of total global energy consumption. Coinshares research shows that.

For reference, total global energy consumption (not production, which is much higher) is estimated to be 162,194 TWh in 2019. Of the 89 TWh of energy consumed per year, the bitcoin mining network uses about 0.05% of the total global energy consumption. In our view, this is a small cost to the global monetary system, and on the global energy balance sheet, it corresponds to a rounding error.

Meanwhile, ESG concerns have led many companies to drop their support for Bitcoin or consider dropping it in the future. For example, the software community Mozilla has suspended the ability to donate cryptocurrency due to "environmental impact" concerns. Tesla has also abandoned Bitcoin acceptance due to its environmental impact. Following Mozilla, the Wikimedia Foundation is considering dropping cryptocurrency donations for the same reason, with Wikimedia members utilizing inaccurate data from Digiconomist, which has been repeatedly debunked for bias and data discrepancies.

K-line chart from Coinshares 2022 Bitcoin Mining Report.

Coinshares' report on bitcoin mining released this week shows that ESG concerns over the past 12 months have been greatly exaggerated. Coinshares says the current focus should be more on producing renewable energy rather than attacking cryptocurrency innovations that have negligible emission rates and energy consumption.

The Coinshares report concludes, "While it is clear that bitcoin mining currently generates emissions, these emissions are not only negligible on a global scale, but they are also unnecessary in and of themselves." "Once our electricity generation is 100% renewable, Bitcoin will be 100% renewable. Our focus should be on building renewable power generation, not stifling the development of cryptocurrency technology."

What do you think about the report released by Coinshares, which shows that the Bitcoin network only accounts for about 0.08% of the world's CO2 production today? Let us know what you think about this topic in the comments section below.

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