Bitcoin struggles to go green, study finds

LONDON is struggling to go green, with the coin making only slim gains in its use of sustainable energy in the year to January, according to research done by Cambridge University on Tuesday.

Processing of transactions and mining new token is done by powerful computers connected to a global network that compete against others to solve complex mathematical puzzles.

The process guzzles electricity, with its heavy reliance on polluting fossil fuels such as coal drawing criticism from policymakers, investors and environmentalists who worry about its impact on global warming.

Some projects have tried to shift the mining of bitcoins towards cleaner energy such as repurposing heat byproducts from oil extraction for cryptocurrencies mining.

While the level of coal fell to 37 per cent from 47 per cent, the value of the digital currency increased to a quarter of its energy mix in January, compared to 16 per cent a year earlier.

The role of sustainable power - classed as nuclear, hydro, wind and solar - in the mix barely rose, hitting about 38 per cent from 35 per cent a year ago. Hydro dropped to 15 per cent from around 20 per cent.

There are few centralised bodies that gather data about mining of virtual currency, with mostly unregulated and opaque ones. The Cambridge study was based on data on the geographical spread of mining across the world and the energy mix of individual countries.

The report said its findings were noticeably deviating from estimates by the U.S. based Bitcoin Mining Council industry body that put the share of sustainable energy in the power mix at about 60 per cent in July.

Alexander Neumueller, the CBECI lead, said we wanted to show what the footprint of the digital currency is. The energy mix has a huge impact on greenhouse gas emissions. It's estimated emissions for 2021 will be 48.4 million tons of carbon dioxide equivalent this year, which is 14 per cent less than the estimated emissions for Bitcoins, according to CBECI.