The Crypto Industry Has Been Misled for Years into Believing That it Uses A lot of Energy, When In fact, It’s Untrue
Crypto has been referred to as the dirty little secret of the real world because it consumes a lot of energy. The largest crypto in the world, Bitcoin, was reported to use more electricity each year, 150 TWh, than the 45 million-person nation of Argentina.
Why the Energy Use is all a Hoax
Crypto annual emissions were estimated to be about 65 megatons of carbon dioxide, or about the same amount as Greece, the production of that energy makes crypto a significant contributor to both global air pollution and climate change. And as mining companies scramble to construct larger facilities in order to capitalize on the digital gold rush, cryptocurrency’s energy requirements are rising.
Existing research in academia and industry frequently bases its assumptions on the hardware being used or the geographic distribution of the computing nodes in order to model the energy consumption of cryptocurrencies. Numerous of these studies have already come under heavy fire for the design decisions they made and the resulting overestimation or underestimation of energy use.
Using existing research from fields familiar with blockchains, such as social energy sciences and information systems, we assess the validity of earlier models and projections. Prior to conducting a systematic literature review, we first design a quality assessment framework based on existing research. After that, we look at both academic and non-academic literature to identify common problems and potential solutions.
Research Observations
Researchers claim that 74% of studies on blockchain energy “do not build upon existing theories.”
The vast majority of the literature on blockchain energy use from academic and non-academic sources “lacks the scientific rigor expected from a mature scientific field,” according to a recent pre-print by researchers at the Open University, University of California Berkeley, and Radboud University. The report examined 128 peer-reviewed and publicly available studies on the carbon emissions of blockchains like Bitcoin.
A startling 34% of studies, the researchers discovered later, lacked even an explicit research design. In contrast, 67% of studies didn’t share their source code, and 43% of them didn’t share any data. Finally, there were no discussions about the validity of outside data in 79% of the studies.
Researchers conducted an analysis and found several notable errors in various studies. First off, the Cambridge Bitcoin Electricity Consumption Index is frequently used in blockchain energy studies to provide data and inform their conclusions. The source explicitly states that it only captures between 32% and 37% of the network’s total computing power.
Analyzing the Dependability of Earlier Models
The reliability of the electricity costs used in such studies is also questioned. Researchers discovered that many studies made “no clear” assumptions about the cost of using electricity for cryptocurrency mining. Furthermore, there is a lot of obscurity in studies when it comes to the effectiveness of the power usage method they use.
The validity of claims made about blockchain carbon emissions was also raised by researchers. In several studies, they discovered that the earlier researchers had merely extrapolated carbon emissions data from 2014 to 2014, from 2019 to 2021, from 2015 all the way up to 2020, and so on, without using any empirical data.
Discussions about the validity of models evaluating the environmental effects of blockchains were encouraged by the report. When evaluating the carbon footprint of blockchains, the cryptocurrency community is still sharply divided. According to some, including Miami’s mayor Francis Suarez, 90% of the energy used for bitcoin mining is dirty energy. Others assert that the network contributes less than 0.08% to global carbon dioxide emissions.
