Bitcoin mining alone will not save the planet, but it is a valuable tool for meeting some of the challenges of the energy transition. More importantly in the context of climate change, bitcoin is essential to preserving liberty and freedom in the face of increasing climate pressure to destabilize nations.
This story is part of CoinDesk’s 2023 Mining Week, sponsored by Gieterij. Margot Paez is a fellow at the Bitcoin Policy Institute, head of sustainability at Block Green, and a consultant on sustainability and bitcoin mining.
Let’s start with what bitcoin mining will not be able to do. Bitcoin mining alone will not increase global warming more than two degrees Celsius above pre-industrial levels. Bitcoin mining, based on CBECI estimates, accounts for about 0.14% of total global emissions. These are just 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 the 1.5 degree Celsius warming over the next decade. Not only that, but there is a good chance that the two-degree target will also be missed due to a lack of strong government action to reduce society’s dependence on fossil fuels.
Bitcoin mining will not be the only catalyst fueling the rise in renewable energy exponential growth. Nor will it push us across the finish line to meet our decarbonization targets. At the Bitcoin Policy Institute, we are busy quantifying exactly what effect it will have, but we suspect that bitcoin’s role as a catalyst for renewable energy will not always be equal in all scenarios.
We shouldn’t expect bitcoin mining to have the easiest time turning to wasted gas sites like landfills, orphaned wells, or oil and gas fields. There is far too much anecdotal evidence to suggest that many of these wasted methane sites are well beyond the reach of bitcoin miners. This means that we should not expect bitcoin miners to reduce all methane emissions from landfills and the oil and gas industry.
I’m not saying bitcoin miners can’t mine with wasted methane – there are several energy startups trying to do just this. But let’s be clear, they will have a hard time surviving the tight profit margins that bitcoin miners face when the market is not in the midst of a bull run. They will need additional streams of income if they are to remain viable in the long run.
Don’t get me wrong, bitcoin mining is doing well! It is agile, highly modular and has minimal uptime requirements. Bitcoin has unique properties that currently make it good at supporting revenue for renewable energy projects. Miners operating in demand response programs help minimize strain on the power grid during severe weather emergencies. There are bitcoin mining companies that sell their waste heat to greenhouses or are working to use it for district heating.
Some miners are limiting methane emissions in the oil and gas industry and a few are trying to prove the business case for landfill and agricultural waste gases. The tighter the profit margins, the more inventive bitcoin miners will have to be. This means that revenue from mining may eventually become a secondary thought in a larger energy operation. Would it be so bad if mining became another boring tool in our clean energy business?
After all, did we really expect Bitcoin to solve climate change with emissions reductions alone? Bitcoin’s biggest impact on climate change will not come from mining, but from the network’s original raison d’être.
Climate change will and will destabilize society with its unpredictable but increasingly likely effects on our food production, water resources and infrastructure. In times of great uncertainty, people often turn to the political strongman. If Bitcoin saves the planet, it will be through the preservation of economic freedom and, with it, human rights. That’s a story I can sing from the highest towers.