Buy $100 worth of crypto and get a bonus $10

  • Trade crypto and digital assets
  • Significant sign-up bonuses
  • The most trusted finance platform

Disclaimer: eToro USA LLC; Investments are subject to market risk, including the possible loss of principal. Your capital is at risk. This ad promotes virtual cryptocurrency investing within the EU (by eToro Europe Ltd. and eToro UK Ltd.) &USA (by eToro USA LLC) which is highly volatile, unregulated in most EU countries, no EU protections & not supervised by the EU regulatory framework. Investments are subject to market risk, including the loss of principal.

  • Home
  • >News
  • >Report: Bitcoin Uses Far Less Energy Than Tourism, Gold Mining, Fashion

Report: Bitcoin Uses Far Less Energy Than Tourism, Gold Mining, Fashion

Big Four auditing firm KPMG recently released a report lauding the use cases of Bitcoin. The report highlights Bitcoin’s success as an asset class and the misconceptions that persist despite that success.

It demonstrates how Bitcoin is actually in service to the ESG (Environmental, Social and Governance) impact areas — a rising trend in corporate circles as investors evaluate companies for their sustainable practices.

The Bitcoin community has seized on the environmental part of the report, rejoicing that an influential company like KPMG is dispelling notions about Bitcoin’s environmental impact.

The development is a reprieve for the original cryptocurrency, which is in the middle of a price slump amid larger industry uncertainty.

Bitcoin environment

Bitcoin vs. Other Industries

According to KPMG, Bitcoin is at par with tumble dryers in global energy usage and doesn’t come close to the amount of energy used by industries and services such as tourism, fashion, gold mining, livestock and manure, and data centres.

The company also absolves Bitcoin of direct emissions, asserting, “Bitcoin does not emit direct emissions much like electric vehicles (EVs) do not emit direct emissions.”

Furthermore, it contests the idea that if Bitcoin really consumed the amount of power it’s been accused of, “One would have expected much more electricity use” and takes on the hyperbolic 2017 Newsweek headline “Bitcoin Mining on Track to Consume All of the World’s Energy by 2020.”

The paper aims to debunk the negative portrayal of Bitcoin’s impact on the environment and society, instead highlighting its positive contributions.

It lays out four ways in which Bitcoin mining is good for the environment: use of renewable energy, demand response, heat recycling, and methane reduction. Let’s look into each of those below.

1. Use of Renewable Energy

According to the report, the very competitive nature of Bitcoin mining incentivizes miners to gravitate towards cheaper power sources, including hydro, wind, and solar.

Bitcoin miners can position themselves near renewable energy sources (“co-locating”), using excess power and saving it during periods of low demand. This further encourages more renewable energy-based mining since it makes more sense economically than non-renewable mining.

The report cites the World Economic Forum, which has contended that “crypto mining can be a catalyst or driver for renewable energy projects.”

2. Demand Response

Demand response is a strategy used in energy to manage power in response to low supply. Per the Department of Energy, it involves adjusting the power usage of a consumer to match better with the current supply. Demand response programs help to decrease energy costs, increase grid reliability, and lower greenhouse gas emissions.

KPMG says the “interruptible nature of mining operations” makes it possible for Bitcoin mines to “curtail their power usage at a moment’s notice to give that power back to the grid in the event that demand exceeds available supply.”

The firm cites Texas’ Winter Storm Uri of February 2021, when temperatures plummeted to -14 degrees and BTC miners in the state were able to reduce their energy usage and contribute approximately 1,500 megawatts back to the grid.

3. Recycled Heat

Per the report, Bitcoin mining reduces greenhouse emissions by recycling mining heat. It states that some Bitcoin miners are already channeling the excess heat for other uses, such as residential areas, commercial buildings and swimming pools.

This is achieved by co-locating mining operations close to buildings or greenhouses and connecting to pre-existing ductwork. This way, heat is redirected to support such facilities.

KPMG gives Canada’s MintGreen as an example of such a Bitcoin mining company. MintGreen has teamed up with local energy company Lonsdale Energy Corp for their unique “Digital Boilers” that convert mining heat into sustainable heat and are helping warm parts of Northern Vancouver.

4. Methane Reduction

The paper highlights the role of Bitcoin in reducing methane gas, which it states is 80 times more potent as a greenhouse gas than carbon dioxide (CO2) over a 20-year period.

It pinpoints companies like Crusoe Energy, which is collaborating with the oil firm Exxon to transform flared gas into electricity for Bitcoin mining, helping cut emissions. Gas flaring is the practice of burning methane instead of releasing it directly into the atmosphere — reducing its environmental impact.

The report also highlights Vespene Energy, a methane mitigation company, which mines Bitcoin at municipal landfills using vented methane that would otherwise be released into the air.

It also notes that landfills contribute to 14.3% of US methane emissions. Bitcoin mining operations like Vespene Energy help capture and convert fugitive methane emissions into usable energy — mitigating their environmental impact.

Bitcoin Powers ESG

KPMG underscores Bitcoin’s positive social impact. It highlights how Ukraine swiftly mobilized funds in the wake of Russia’s invasion, an exercise that would have proven more difficult with traditional money transfers.

Moreover, Bitcoin mining, when co-located with microgrids, harnesses wasted energy, benefiting local communities.

The company commends how Bitcoin promotes financial inclusion and how it has revolutionized payments and remittances. It also highlights Bitcoin’s inherent decentralized nature that makes it tamper-proof, with thousands of users having their local copy of the ledger, ensuring transparency.

Bitcoin’s Environmental Debate

Bitcoin’s environmental debate has been raging since the currency’s very inception. Due to perhaps the view that Bitcoin is an extraneous demand on the energy grid, it hasn’t mattered whether the cryptocurrency uses a fraction of the global energy supply or not.

Yet, this has been the rallying cry for environmentalists and some regulators as to why to ban the cryptocurrency. Such alarms haven’t gone unheeded.

Electric car company Tesla jumped ship from Bitcoin payments after sustained pressure, with regions such as China’s Inner Mongolia banning the currency’s mining out of environmental concerns.

Bitcoiners hope that KPMG’s report presents a turning point for how Bitcoin is perceived. The endorsement from a firm of KPMG’s stature, making a case for the cryptocurrency’s positive contribution to ESG, can help move the needle, even if not on the spot.

Article Tags
Hope Mutie

About the Author

Hope Mutie

Hope Mutie is a professional writer and editor whose interests include fintech, cryptocurrency, and blockchain. She engages with crypto audiences by curating content that’s fun-to-read, educational, and offers unmatched value. Hope is part of the brilliant team at Go Full Crypto – a podcast and service that enables your transition into crypto.

Back To Top