Can Bitcoin Stop Climate Change? Proof of Work, Energy Consumption and Carbon Footprint (SoK) by Juan Ignacio Ibanez and Alexander Freier

The authors examine the strengths and limitations of Bitcoin mining to provide flexible load response services for energy grids. Additionally, the paper examines the potential for containerized mining solutions to mitigate and curtail the effects of vented methane, whether in situ at natural gas vents or co-located with landfill waste methane sources. They note that methane-based bitcoin mining is reported to reduce GHG emissions by 50% to 63% compared to traditional flaring, on top of making use of otherwise wasted energy.

Abstract:

“Despite their potential in many respects, blockchain and distributed ledger technology (DLT) technology have been the target of criticism for the energy intensity of the proof-of-work (PoW) consensus algorithm in general and of Bitcoin mining in particular. However, mining is also believed to have the potential to drive net decarbonization and renewable penetration in the energy grid by providing ancillary and other services. In this paper, we systematize the state of the art in this regard. Although not completely absent from the literature, the extent to which flexible load response through PoW mining may support grid decarbonization remains insufficiently studied and hence contested. We approach this research gap by systematizing both the strengths and the limitations of mining to provide flexible load response services for energy grids. We find that a net-decarbonizing effect led by renewable-based mining is indeed plausible.”.”

3 February 2023


Link to Full Article

Ibañez, Juan Ignacio and Freier, Alexander, Can Bitcoin Stop Climate Change? Proof of Work, Energy Consumption and Carbon Footprint (SoK) (February 3, 2023). Available at SSRN: https://ssrn.com/abstract=4347220 or http://dx.doi.org/10.2139/ssrn.4347220