Economic estimation of Bitcoin mining’s climate damages demonstrates closer resemblance to digital crude than digital gold

This paper provides economic estimates of the energy-related climate damages of mining Bitcoin (BTC), the dominant proof-of-work cryptocurrency. We provide three sustainability criteria for signaling when the climate damages may be unsustainable. BTC mining fails all three. We find that for 2016–2021: (i) per coin climate damages from BTC were increasing, rather than decreasing with industry maturation; (ii) during certain time periods, BTC climate damages exceed the price of each coin created; (iii) on average, each $1 in BTC market value created was responsible for $0.35 in global climate damages, which as a share of market value is in the range between beef production and crude oil burned as gasoline, and an order-of-magnitude higher than wind and solar power. Taken together, these results represent a set of sustainability red flags. While proponents have offered BTC as representing “digital gold,” from a climate damages perspective it operates more like “digital crude”.

Jones, Benjamin A., Andrew L. Goodkind, and Robert P. Berrens. 2022. “Economic Estimation of Bitcoin Mining’s Climate Damages Demonstrates Closer Resemblance to Digital Crude than Digital Gold.” Scientific Reports 12 (1): 14512. https://doi.org/10.1038/s41598-022-18686-8.

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