Bitcoin is as bad for the environment as oil and beef

Mining bitcoins takes a lot of energy and the environmental impact of every euro you earn from mining bitcoin is just as bad as that of, for example, petroleum or eating beef. But is this correct?

Bitcoin mining costs a lot of energy-guzzling calculations

Proof of work cryptocurrencies such as bitcoin are scarce, because it takes a lot of math to solve the crypto puzzle that generates bitcoins. That more or less maintains the value, because it is very difficult to make new coins.

But the disadvantage is that this also costs a lot of energy. Energy, which comes largely from fossil sources. And that’s not even talking about the electronics needed to mine bitcoins. It also takes a lot of energy to make.

“Bitcoin is quite polluting”

experts, published in the leading scientific journal Nature, have calculated exactly how much energy this costs. And that seems to be quite a lot. If all energy costs are taken into account, every euro earned with bitcoins, with €0.35 environmental damage, produces about the same amount of damage to the environment as petrol (€0.42) and beef (€0.33).

But is this correct?

Bitcoins are often mined in places where there is abundant cheap energy that cannot be used by other buyers. For example, in remote Iceland. It is also rather one-sided to only look at climate damage, as in this article.

More CO2 also has advantages. For example, the harvests are about 10% higher than without that CO2. Beef takes a heavy toll on scarce land, which Bitcoins don’t.

Petroleum Enriches Dictators

And with oil, geopolitics comes into play again. Because because we import oil from autocratically governed countries, it remains attractive for those countries to continue to oppress their populations, instead of helping their populations to develop and thus earn money with tax revenues.

Furthermore, we also need to look at what Bitcoin replaces. That is, the entire banking sector. Then it suddenly becomes a completely different picture. Which does not alter the fact that there are of course smarter cryptos that cost much less energy to mine. Then it becomes a completely different story.