UN Spreads Bitcoin FUD. Here’s What They Missed

• The UN published a scathing report on Bitcoin’s environmental impact.
• UN researchers found Bitcoin’s energy mix was from most non-renewable sources.
• Alternative research shows mostly renewable sources power the Bitcoin network.

Bitcoin’s massive energy appetite and environmental impact have become contentious, sparking division among experts and the public alike. Using alarming statistics, critics have repeatedly decried Bitcoin as an environmental disaster, with some even calling for an outright ban on proof-of-work mining.

The United Nations (UN) recently released a report reiterating concerns about the sustainability of Bitcoin, echoing criticisms of its negative ecological impact. The report has lent credibility to fears that the pioneering digital currency may be unsustainable, reigniting debate on the long-term viability of Bitcoin mining.

UN Objects to BTC’s Environmental Impact

UN scientists painted a disturbing picture of Bitcoin mining’s environmental footprint, stating that the Bitcoin network consumed over 173 Terawatt-hours of electricity between 2020 and 2021, rivaling the energy consumed by an average mid-sized country. 

“This means that if Bitcoin were a country, its energy consumption would have ranked 27th in the world, ahead of a country like Pakistan, with a population of over 230 million people”, read the UN report.

According to UN researchers, Bitcoin mining relies heavily on fossil fuels, while renewable energy sources comprise the minority of the energy mix. The UN’s data showed that the network’s energy mix consisted of 45% coal, 21% gas, and 9% nuclear, with renewable sources comprising only 23% broken down as 16% hydroelectric, 5% wind, and 2% solar.

The resulting carbon footprint was equivalent to burning 84 billion pounds of coal or operating 190 natural gas-fired power stations. To offset this footprint, 3.9 billion trees would need to be planted, covering an area almost equal to the area of the Netherlands, Switzerland, or Denmark.

Despite the alarming statistics, alternative data sources paint a different picture of Bitcoin’s environmental impact.

The Bitcoin Mining Council 

Research conducted by the Bitcoin Mining Council (BMC) gave an alternative picture of Bitcoin’s environmental impact. In its most recent report, the BMC found that the network’s sustainable energy mix came in at 63.1%, much higher than the UN’s 23% figure. 

Furthermore, the network’s sustainable energy mix had increased from the prior period’s 58.9% value, suggesting an awareness of the issue among miners and sustained efforts to move away from non-renewable energy sources.

In terms of energy consumption, the BMC’s data noted that Bitcoin used “an inconsequential amount of global energy” at 21 basis points and gave off “negligible carbon emissions” at 14 basis points. 

Basis points refer to one-hundredth of a percentage point; therefore, Bitcoin used 0.21% of the global energy supply in the first half of 2023, according to the BMC, and accounted for just 0.14% of global carbon emissions over the same period.

On the Flipside

• A huge discrepancy between the energy mix figures from the BMC and UN suggests wildly divergent research methods.
• BTC mining consumes less than half the energy of the global banking sector, according to Galaxy Digital.
• The UN report does not factor in Bitcoin’s financial benefits, particularly in under-banked countries, which justify a degree of environmental impact.

Why This Matters

The environmental impact of cryptocurrencies is multi-faceted, calling for a balanced, nuanced analysis of the situation. As the crypto sector grows, all stakeholders must collaboratively develop solutions. How these complex challenges are addressed will profoundly shape the sector’s future.

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