Bitcoin Emissions Down 52%, Outpaces Banking Sector in Sustainability

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Reducing Greenhouse Gas Emissions Through Bitcoin

In the last five years, Bitcoin has made significant strides in reducing its greenhouse gas emissions. Current data shows that Bitcoin’s emissions have decreased by 52% during this period. This is a significant milestone for the cryptocurrency, which is often criticized for its high energy consumption.

Bitcoin is Going Green

According to an analysis by Daniel Batten, a renowned analyst for the environmental impacts of Bitcoin, the emission intensity of Bitcoin is currently at its lowest level. Emission intensity refers to the amount of carbon dioxide (CO2) emitted per unit of energy produced. Bitcoin miners need electricity to run their machines and generate more Bitcoins, which contributes to securing the blockchain. With the strong reduction in greenhouse gas emissions, Bitcoin has become more environmentally friendly than many other sectors.

Bitcoin Compared to Gold and the Banking Sector

The analysis also shows that the CO2 footprint of the entire banking sector, at 464 g/KWH, is significantly higher than that of Bitcoin and has shown a much lower rate of improvement over the last four years. In addition, an evaluation of the Cambridge Bitcoin Electricity Consumption Index revealed that the estimated annual emissions of Bitcoin, at 87.77 million tonnes of CO2 equivalent (MtCO2e), are lower than those of gold at 100.4 MtCO2e.

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Sustainable Energy Sources Drive Change

The decline in emissions could be due to miners’ preference for cheaper and cleaner energy sources. Another report by Daniel Batten from last year revealed that Bitcoin uses more than 50% sustainable energy, making it the world’s leading industrial user of sustainable energy. The economic benefits of renewable energy are well-known, so there is a strong incentive for miners to use the cheapest energy sources for their facilities. This has helped to boost the hashrate and make the network more secure.

Outlook

The data shows that Bitcoin has made significant progress in terms of environmental sustainability. The use of sustainable energy sources and the reduction of greenhouse gas emissions are positive developments that can help to mitigate criticism of Bitcoin’s high energy consumption. It remains to be seen how these trends will develop in the coming years.

Sources: Daniel Batten, Cambridge Bitcoin Electricity Consumption Index, Glassnode

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Last update: 19. February 2024

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