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Bitcoin’s Carbon Footprint Revisited: Proof of Work Mining for Renewable Energy Expansion

Author

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  • Juan Ignacio Ibañez

    (UCL Centre for Blockchain Technologies, University College London, London WC1E 6BT, UK
    DLT Science Foundation, London EC2M 7DT, UK
    Facultad de Ciencia Politica y Relaciones Internacionales, Universidad Catolica de Cordoba, Cordoba 3555, Argentina
    These authors contributed equally to this work.)

  • Alexander Freier

    (UCL Centre for Blockchain Technologies, University College London, London WC1E 6BT, UK
    Facultad de Ciencia Politica y Relaciones Internacionales, Universidad Catolica de Cordoba, Cordoba 3555, Argentina
    Energiequelle GmbH, 15806 Zossen, Germany
    These authors contributed equally to this work.)

Abstract

While blockchain and distributed ledger technology offer immense potential for applications in transparency, security, efficiency, censorship resistance, and more, they have been criticized due to the energy-intensive nature of the proof of work consensus algorithm, particularly in the context of Bitcoin mining. We systematically explore the state-of-the-art regarding the relationship between Bitcoin mining and grid decarbonization. We specifically focus on the role of flexible load response through proof of work mining as a potential contributor to renewable energy penetration and net decarbonization of the energy grid. The existing literature has not comprehensively examined this area, leading to conflicting views. We address the gap, analyzing the capabilities and limitations of Bitcoin mining in providing flexible load response services. Our findings show that renewable-based mining could potentially drive a net-decarbonizing effect on energy grids, although key adaptations in mining practices are needed to fully realize this potential. Overall, the paper suggests a re-evaluation of the environmental impact of Bitcoin mining, highlighting its potential role as a facilitator for renewable energy expansion, and decarbonization more broadly.

Suggested Citation

  • Juan Ignacio Ibañez & Alexander Freier, 2023. "Bitcoin’s Carbon Footprint Revisited: Proof of Work Mining for Renewable Energy Expansion," Challenges, MDPI, vol. 14(3), pages 1-21, August.
    • Handle: RePEc:gam:jchals:v:14:y:2023:i:3:p:35-:d:1212834
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    References listed on IDEAS

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    Cited by:

    1. Rupert L. Matthews, 2024. "Untangling the Processes of Bitcoin: An Organizational Learning Perspective," Challenges, MDPI, vol. 15(1), pages 1-18, February.
    2. Rupert L. Matthews, 2024. "Theory of Constraints and Bitcoin: Introducing a New Fulcrum," Challenges, MDPI, vol. 15(1), pages 1-8, January.
    3. Murray A. Rudd & Lee Bratcher & Simon Collins & David Branscum & Matthew Carson & Shaun Connell & Elliot David & Magdalena Gronowska & Sebastien Hess & Austin Mitchell & Matt Prusak & Kyle Schneps & M, 2023. "Bitcoin and Its Energy, Environmental, and Social Impacts: An Assessment of Key Research Needs in the Mining Sector," Challenges, MDPI, vol. 14(4), pages 1-29, November.
    4. 斉藤, 賢爾 & SAITO, Kenji & 副島, 豊 & SOEJIMA, Yutaka & 杉浦, 俊彦 & SUGIURA, Toshihiko & 北村, 行伸 & KITAMURA, Yukinobu & 岩村, 充 & IWAMURA, Mitsuru, 2023. "Ethereum Proof of Stake は持続可能か : スマートコントラクト基盤間競争の観点から考える, Is Ethereum Proof of Stake Sustainable? : Considering from the Perspective of Competition Among Smart Contract Platforms," Discussion Paper Series 748, Institute of Economic Research, Hitotsubashi University.
    5. Kenji Saito & Yutaka Soejima & Toshihiko Sugiura & Yukinobu Kitamura & Mitsuru Iwamura, 2023. "Is Ethereum Proof of Stake Sustainable? $-$ Considering from the Perspective of Competition Among Smart Contract Platforms $-$," Papers 2309.11394, arXiv.org.
    6. Georgeio Semaan & Guizhou Wang & Quoc Si Vo & Gopalakrishnan Kumar, 2024. "The Potential Relationship between Biomass, Biorefineries, and Bitcoin," Sustainability, MDPI, vol. 16(18), pages 1-13, September.

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