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Bitcoin is the largest cryptocurrency using the outmoded and high-energy “Proof of Work” (PoW) consensus mechanism. The “work” is specialized computers racing against one another to solve algorithms and validate transactions on a blockchain ledger. Once the algorithms are solved and transactions are validated, new Bitcoins are rewarded to the “miner” of the correct ledger, which is then added to the blockchain ledger.

The faster a computer works to solve the algorithmic puzzle, the greater the chances of earning Bitcoin. Speed requires massive amounts of energy to run banks of computers collectively called mining rigs. As the puzzles become harder to solve, more computer power requires more energy. The lower the energy costs, the higher the profit margins for the miners, which is why they seek out cheap electricity, often originating from polluting coal and other fossil fuel generation. Recent reports estimate that in 2020, Bitcoin mining used 75.4 TWh/yr of electricity, which is more energy used by all of Austria in 2020.^[1]

^[1] Page 2 Jones, B.A., Goodkind, A.L. & Berrens, R.P. Economic estimation of Bitcoin mining’s climate damages demonstrates closer resemblance to digital crude than digital gold. Sci Rep 12, 14512 (2022).https://doi.org/10.1038/s41598-022-18686-8.
 

No; globally, Bitcoin mining is dependent on coal-fired power. According to Cambridge Bitcoin Electricity Consumption Index (CBECI) research, Bitcoin mining's largest single energy source is coal.^[2] The research found that coal and other fossil fuels (oil and gas) account for almost two-thirds of the total electricity mix (62.4%), and only 26.3% are renewables and 11.3% from nuclear power.^[3]

Even if Bitcoin mining could be entirely fueled by renewable power, renewable energy is best deployed in other sectors of the economy. Residential, commercial, and industrial buildings, transportation, and material production, among other essential areas, must be prioritized for renewable generation. 

In the United States, there is no requirement - under current law - that Proof of Work crypto-mines must be powered by renewable energy or be more energy efficient. 

^[2] https://www.jbs.cam.ac.uk/insight/2022/a-deep-dive-into-Bitcoins-environmental-impact/
^[3] Ibid.

No, electricity used by a mining operation cannot be exported or redeployed elsewhere, nor can it provide energy storage capacity or optimize the functioning of the grid.^[4] When miners increase the demand on the electrical grid, they typically increase electricity rates for all customers. For example, in Plattsburgh, N.Y., residents and small businesses collectively paid $244 million more in higher electric bills in one year due to Bitcoin mining in their area.^[5] Also, by increasing demand on the electrical grid, miners spur demand response utility programs and associated costs.^[6] ERCOT, Texas’s independent market monitor, estimates that Texans could pay an additional $1.5 billion for electricity in 2022, partly to cover payment to cryptocurrency miners that shut down operations during peak demand.^[7]

^[4]  Page 24. DeRoche, M., Fisher, J., Thorpe, N., and Wachspress, M., The Energy Bomb: How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now (Sept. 2022).
^[5] Laura Counts, Power-hungry cryptominers push up electricity costs for locals, Berkeley Hass (Aug. 3, 2021), https://newsroom.haas.berkeley.edu/research/power-hungry-cryptominers-push-up-electricity-costs-for-locals/; Mateo Benetton et al., When Cryptomining Comes to Town: High Electricity-Use Spillovers to the Local Economy, SSRN (May 14, 2021), https://newsroom.haas.berkeley.edu/research/power-hungry-cryptominers-push-up-electricity-costs-for-locals/#:~:text=By%20looking%20at%20surges%20in,and%20%2412%20for%20small%20businesses
^[6] Page 25. DeRoche, M., Fisher, J., Thorpe, N., and Wachspress, M., The Energy Bomb: How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now (Sept. 2022).
^[7] Ibid.

No. Regulators can and should eliminate the problem by requiring oil and gas companies to capture and cap methane. And, as science shows, oil and gas production needs to be phased out as quickly as possible. By paying for fossil gas, Bitcoin miners incentivize more oil and gas drilling, delaying our transition away from fossil fuels. We already have real solutions to the problem of flared gas. Bitcoin miners burning gas to make electricity for their energy-hungry operations are extending a lifeline to fossil fuel extraction, not creating a real climate solution.

Carbon credits or offsets permit the credit owner to emit a certain amount of greenhouse gasses in return for an equal amount elsewhere not being emitted into the atmosphere. One credit equals one ton of carbon dioxide emissions or the equivalent of other greenhouse gasses. Renewable Energy certificates (RECs) are issued when one megawatt-hour (MWh) of electricity is generated and delivered to the electricity grid from a renewable energy resource. Both offsets and RECs can help mitigate greenhouse gas emissions. However, they are increasingly viewed as a "complementary tool or additional tool" that should not delay or be a substitute for GHG emission reductions within a company's or industry's activities.^[8]

Bitcoin miners often claim to be "carbon neutral" after purchasing these offsets or renewable energy certificates. Credits can be controversial, verification is complex, and may not reduce carbon pollution in many instances.^[9] While a mining operation using renewable energy can be independently verified as doing so, other key essential energy needs, such as industrial production, should be prioritized as we need to transition to a clean energy economy rapidly. The key is to reduce the massive amounts of energy used for Bitcoin mining in the first place, not create a problem, and seek creative new ways to ameliorate the impact.^[10] In addition, a mining company’s use of renewable energy doesn’t mitigate noise and thermal water pollution from cooling the mining computers.

^[8]  P. 28. OSTP (2022). Climate and Energy Implications of Crypto-Assets in the United States. White House Office of Science and Technology Policy. Washington, D.C. September 8, 2022.
^[9] P. 22. DeRoche, M., Fisher, J., Thorpe, N., and Wachspress, M., The Energy Bomb: How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now (Sept. 2022).
^[10] P. 23. DeRoche, M., Fisher, J., Thorpe, N., and Wachspress, M., The Energy Bomb: How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now (Sept. 2022).

No. Our campaign includes criticism of Bitcoin’s current validation protocol, but we are not condemning Bitcoin itself or any other cryptocurrency. Our campaign invites the Bitcoin community to become part of real solutions to the climate crisis. Bitcoin changed the world once; we believe it can do so again by developing and adopting a new, secure, distributed validation protocol that does not rely on enormous and anomalous electricity use.

According to the Cambridge Bitcoin Electricity Consumption Index (CBECI), in 2022, Bitcoin mining emitted 48.35 MtCO2e of greenhouse gas (GHG) emissions,^[11] equal to over 285,000 rail cars of coal burned in one year or over 10,300,000 car miles driven in one-year.^[12] We want Bitcoin and other Proof of Work cryptocurrencies to switch to a low-energy consensus mechanism. We are agnostic to what that exact solution is, but any protocol change should be at least as efficient as Proof of Stake, which uses 99.5% less electricity than Proof of Work. We are fully aware of the barriers to doing so, but it is technically and politically possible to change the code, as the recent Ethereum merge demonstrated. 

We are also against environmental pollution and other impacts, such as electricity rate hikes affecting local communities. As electricity demand increases from mining, more coal-power and natural gas-powered plants are deployed for electricity to mining operations. These plants often cost more and create noise, water, and air pollution. 

Pollution controls are rarely deployed by the cryptocurrency mining company using fossil-fuel plants unless pushed to do so by regulators.^[13] These local impacts can also worsen existing environmental injustices burdening neighboring communities.

^[11] https://www.jbs.cam.ac.uk/insight/2022/a-deep-dive-into-Bitcoins-environmental-impact/
^[12] US Environmental Protection Agency Greenhouse Gas Equivalencies Calculator: https://www.epa.gov/energy/greenhouse-gas-equivalencies-calculator#results
^[13] p. 15. DeRoche, M., Fisher, J., Thorpe, N., and Wachspress, M., The Energy Bomb: How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now (Sept. 2022).

When countries like China and Kosovo banned mining in 2021, new operations went elsewhere seemingly overnight using more polluting energy sources. And new research from the Cambridge Centre for Alternative Finance shows that Chinese bitcoin mining activity has returned illegally, showing that banning miners is a short-term intervention and just moves the problem elsewhere, adversely impacting local communities.

Bitcoin has changed its code many times, as recently as 2021. Although Bitcoin is not owned by any one person or by a group of shareholders, if a relatively small number of people, the primary miners, exchanges, and core developers who build and contribute to Bitcoin’s code, agree to reinvent proof-of-work mining or move to a low-energy protocol, Bitcoin would stop polluting the planet. Such action is not unprecedented. Most recently, Ethereum, another decentralized cryptocurrency with the second largest market capitalization, changed its code from Proof of Work to Proof to Stake and now uses 99.95% less energy to validate transactions.

Institutional investors and individuals with large Bitcoin investments, like Fidelity, BlackRock, Goldman Sachs, Mastercard, PayPal, Jack Dorsey, and Elon Musk, can use their influence to join the growing movement calling for a Bitcoin code change and invest in what matters most: a thriving, livable planet.

All financial institutions and other sectors must implement low- to no-carbon policies and measures for their operations and investments.

However, Bitcoin’s energy consumption ratio to the number of people buying or retaining Bitcoin or even working at mining facilities is much greater than that of people using traditional (fiat) financial mechanisms. Some estimates indicate that a single Bitcoin transaction uses more energy than 100,000 Visa transactions.^[14] And, Bitcoin uses half as much electricity as the whole global banking sector, according to one estimate, and will overtake the banking sector within two years if current trends continue.^[15]

The climate movement has and will continue to pressure big banks to address not only their operational footprints but also investments in climate-destroying industries. There is a robust movement holding them accountable, and many have made commitments to divest from fossil fuels. Yet, many Wall Street firms and banks are now big players in Bitcoin, and we are urging them to take an active role in facilitating a code change.

^[14]  Ibid.
^[15] p. 25. DeRoche, M., Fisher, J., Thorpe, N., and Wachspress, M., The Energy Bomb: How Proof-of-Work Cryptocurrency Mining Worsens the Climate Crisis and Harms Communities Now (Sept. 2022).