While we have made great strides in shifting the narrative around Bitcoin’s bad environmental image (see this recent surprisingly optimistic report from Christian Stoll, Lena Klaaßen, Ulrich Gallersdörfer and Alexander Neumüller), we have to remember to stay balanced in our messaging.
Bitcoin mining alone won’t save the planet, but it is a valuable tool for managing some of the challenges of the energy transition. More important in the context of climate change is that bitcoin is essential for preserving freedom and liberty when growing climatic pressure to destabilize nations.
This story is part of CoinDesk's 2023 Mining Week, sponsored by Foundry. Margot Paez is a fellow at the Bitcoin Policy Institute, head of sustainability at Block Green and a sustainability and bitcoin mining consultant.
Let us start with what bitcoin mining will not be able to do. Bitcoin mining won’t push global warming past two degrees Celsius above pre-industrial levels all on its own. Bitcoin mining, based on CBECI estimates, accounts for roughly 0.14% of total global emissions. This is but a few drops in a bucket of greenhouse gas emissions.
In reality, even if we banned bitcoin mining today, humanity would still be well on track to surpass 1.5 degrees Celsius of warming in the next decade. Not only that but there is a good chance that the two degrees target will also be missed due to a lack of strong governmental action to reduce society’s reliance on fossil fuels.
Bitcoin mining will not be the sole catalyst that increases the rise in exponential growth in renewable energy. Nor will it push us over the finish line for meeting our decarbonization goals. At the Bitcoin Policy Institute, we are busy trying to quantify exactly what effect it will have, but we suspect that network dynamics being what they are, bitcoin’s role as a renewables catalyst will not always be equal in all scenarios.
We should not expect bitcoin mining to have the easiest time setting up on wasted gas sites like landfills, orphaned wells or oil and gas fields. There is way too much anecdotal evidence that suggests many of these wasted methane sites are well out of the reach of bitcoin miners. This means that we should not expect bitcoin miners to mitigate all methane emissions from landfills and the oil and gas industries.
I am not saying bitcoin miners cannot mine with wasted methane – there are several energy startups trying to do just this. But let us be clear, they are going to have a hard time surviving the tight profit margins that bitcoin miners face when the market is not in the middle of a bull run. They are going to need additional revenue streams if they want to stay viable in the long term.
Do not misunderstand me, bitcoin mining is doing good! It is agile, highly modular and has minimal requirements for uptime. Bitcoin has unique properties that make it good at supporting revenue for renewable energy projects right now. Miners active in demand response programs are helping minimize strain on the electrical grid during severe weather emergencies. There are bitcoin mining companies that are selling their waste heat to greenhouses or working on using it for municipal heating.
See also: Crypto Miners Are Pivoting to AI (Like Everyone Else) | Mining Week 2023
Some miners are mitigating methane emissions in the oil and gas industry and there are a few trying to prove the business case for landfill and agricultural waste gasses. The tighter the profit margins, the more inventive bitcoin miners will have to be. This means that mining revenue might end up being a secondary thought in a larger energy operation. Would it be so bad if mining becomes another boring tool in our clean energy operations?
After all, did we really expect Bitcoin to solve climate change with emissions reductions alone? Bitcoin’s greatest impact on climate change will not come from mining but from the network’s original raison d’etre.
Climate change will and is destabilizing society with its unpredictable but increasingly probable effects on our food production, water resources, and infrastructure. People often turn to the political strongman in times of deep uncertainty. If Bitcoin does save the planet, it will be through its preservation of economic liberty and with that, human rights. Now that is a narrative that I can sing from the highest towers.