According to a new study published today in the journal Scientific Reports, the environmental and social damage caused by the use of Bitcoins is comparable to industries such as beef production and crude oil burning as gasoline. According to the research, every $1 in market value generated an average of 35 cents in climate damages.
In terms of damages, beef production was responsible for 33 cents. When it comes to their economic value and environmental impact, it's often compared to gold. The study found that the climate damages from the digital currency were more than gold.
Andrew Goodkind, a co-author of the study and an assistant professor of economics at the University of New Mexico, said in an email that the climate damage share of the digital currency is nearly an order of magnitude higher than mining gold.
Climate damages are what they are. The dollar cost of future harm to the planet from climate change was estimated using a key metric. The social cost of carbon takes into account losses in agricultural and labor productivity caused by rising sea levels. Climate models and other data are used to calculate how much damage will be done for every extra ton of carbon dioxide.
The network eats up as much power as a small country. Most of the energy is used to verify transactions. The authors estimated how much electricity the network uses and how much carbon dioxide it produces. The social cost of carbon was used to calculate dollar damages. Climate damages were found to average $3,088 for each coin mined, with the social cost of carbon at $100 a ton. The researchers estimate that the total climate damages for the world between 2016 and 2021.
There is still debate over how much the social cost of carbon should be. The researchers used a baseline of $100 a ton. When crafting regulations for pollution, the US government puts the social cost of carbon at $51 per ton. The research was published in the journal Nature.
The researchers pointed out that climate damages grew over time, whether using low or high-end estimates. Their findings come on the heels of other efforts to quantify the harm done to the planet. A September report from the White House Office of Science and Technology Policy said that cryptocurrencies are responsible for about as much pollution as diesel fuel.
When it comes to its impact on the environment,bitcoin is an outlier. In order to reduce its energy consumption in a highly anticipated event called The Merge, its closest rival, ethereum, recently completed a major software update. That is an example of a potential solution to make cryptocurrencies more sustainable. The study says that if a similar update were to be made, its climate damages would be negligible.
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