New research exposes critical flaws in supposed benefits of bitcoin mining: ‘Short-sighted and ill-founded’ #CriptoNews

Pro-bitcoin groups have asserted that mining the cryptocurrency can fuel the clean energy transition. They say bitcoin mining can make use of surplus energy generated by renewable energy sources.

However, according to the Bulletin of the Atomic Scientists, “A close look at these bitcoin-is-climate-friendly claims shows they are short-sighted and ill-founded.”

As the report details, bitcoin miners have been pushing a narrative that they can increase the profitability of renewable power plants and attract clean-energy investments. It is encouraging to think that bitcoin mining could help us transition away from dirty energy.

However, the Bulletin’s experts say this concept does not factor in all the dynamics of the bitcoin mining market.

First, bitcoin miners use large amounts of energy and hardware. Miners can use excess energy produced by solar and wind plants that exceed consumption demands.

However, a surplus of clean energy does not necessarily mean eliminating dirty energy from the system. Instead, resource consumption and e-waste volume likely increase as people deploy additional mining devices, according to the report.

The analysts also point to the issue of renewable energy being generated in places far away from where it’s needed most.

“Bitcoin mining, however, creates counterincentives by offering short-term profits on surplus energy,” the authors wrote. “In the long term, this hinders critical investments in storage and grid infrastructure.”

Understanding the environmental impacts of bitcoin mining is critical because of the rapid expansion of cryptocurrency worldwide. The bitcoin industry has recently made pollution reduction attempts. However, cryptocurrency continues to strain energy grids, increase carbon pollution (when the electricity supply depends on dirty energy), worsen local air pollution, and raise retail electricity rates.

Since the bitcoin system is decentralized and not effectively governable, regulating its environmental impact is challenging, per the analysts. The Witten/Herdecke University researchers have suggested global pricing strategies to address bitcoin’s high energy consumption and e-waste risks.

Other suggestions include avoiding subsidizing bitcoin mining activities and policies that would increase bitcoin’s market capitalization. Meanwhile, greater public awareness about bitcoin’s social and environmental costs can influence investment decisions and impact bitcoin’s price.

“Our model shows that while surplus energy can lower the network’s CO2 emissions, it simultaneously incentivizes increased mining activity, leading to greater electronic waste, which may offset environmental gains,” the researchers wrote.

In a LinkedIn post, Bulletin Executive Editor Dan Drolette wrote: “Bitcoin mining provides a temporary economic use for surplus renewable energy. But it reduces the incentives to invest in the infrastructure that could make this energy more accessible — one of the key roadblocks to renewables.”

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