Bitcoin Mining Fights to Go Green

Bitcoin mining is struggling to go green, with the cryptocurrency making only modest gains in sustainable energy use in the year to January, research by the university of Cambridge showed on Tuesday.

The processing of bitcoin transactions and the “mining” of new tokens is carried out by powerful computers, connected to a global network, which compete with others to solve complex mathematical puzzles.

The process consumes electricity, with its heavy reliance on polluting fossil fuels such as coal, which has drawn criticism from policymakers, investors and environmentalists concerned about its impact on global warming.

Projects have been looking for ways to shift bitcoin mining to cleaner energy, such as reusing the heat byproduct of oil extraction for crypto mining.

Yet fossil fuels made up about 62% of bitcoin's energy mix in January 2022, the most recent data available, compared to 65% a year earlier, research by the Cambridge Bitcoin Electricity Consumption Index (CBECI) shows.

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

The role of sustainable energy – classed as nuclear, hydro, wind and solar – in the mix has barely increased, reaching about 38% from 35% the previous year. Hydro dropped to 15% from about 20%.

Bitcoin mining is largely unregulated and opaque, with several centralized bodies collecting data. The Cambridge study is based on data on the geographic spread of mining around the world and each country's energy mix.

The report said its findings "severely deviate" from estimates by the US-based Bitcoin Mining Council industry body which in July put the share of sustainable energy in bitcoin's power mix at around 60%.

“We are trying to show what a bitcoin footprint is,” said CBECI leader Alexander Neumueller.

Bitcoin's greenhouse gas emissions will reach 48.4 million tonnes of carbon dioxide equivalent this year, about 14% lower than the emissions forecast for 2021, CBECI said.