The new report assessed the environmental impact of Bitcoin and other crypto assets, and gave BTC a particularly harsh light. One Bitcoin transaction claimed to be using as much power as the average UK home in three weeks.
Global hashrate and carbon offset renewable energy is a key metric, but it is difficult to fully quantify. Currently, electricity costs seem to be the most reliable way to measure green credentials on a blockchain.
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The shocking environmental impact of Bitcoin
From the beginning of Bitcoin, Crypto’s environmental impact has been a long-term concern in the industry, especially as it is a lightning bolt of political pushback.
All striped web3 companies frequently sell green authenticity, but this can be difficult to quantify properly. Therefore, researchers conducted thorough research.
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The report is particularly critical of Bitcoin and uses it as a stand-in for the entire work blockchain protocol.
These projects have an exponentially higher environmental impact than other crypto assets. One Bitcoin transaction can use more electricity than the average UK household consumes in three weeks.
However, raw power consumption is not the only metric involved here. Renewable energy can power Bitcoin mining, but coal is also a major contributor to the global hashrate.
Similarly, while some companies advertise the purchase of carbon offsets, many scientists now believe the metric is deeply flawed.
Many considerations to calculate
For these reasons, assessing the true environmental costs of Bitcoin is a very complicated business. The report determined that only a few crypto assets that can compete with Tradfi payment platforms, including credit cards such as Solana, Algorand and Nano, can compete.
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“When I tested these networks myself, I felt that comparing numbers must be wrong by side by side. Sending a Bitcoin transaction with a Solana transaction was like comparing a transatlantic flight to flicking a light switch,” argued Paul Holmes, author of the report.
These networks are designed to be as “lightweight” as possible, using minimal power. Many projects like HBAR and Cardano complement this structure with carbon offsets, but it is not easy to objectively assess its effectiveness. One recent example shows why positive blockchain efficiency is so important.
Ethereum once had an environmental impact comparable to Bitcoin, but the 2022 merge reduced energy consumption by more than 99%. This highlights the gap between proof of work and proof of stake blockchain, making BTC look obsolete.
But despite this significant improvement, ETH releases much more carbon than blockchains that always focus on efficiency. In fact, Solana is the largest “ultra-lightweight” protocol that can certainly compete with the energy use of the TradFi payment platform.
To be clear, Bitcoin still has many clear uses, but its environmental impact is probably good to recapture. Conscious cryptography enthusiasts should be aware of these considerations.
