Bitcoin could potentially be a catalyst for the global energy transition and reduce harmful emissions, according to a study by the Institute of Risk Management.
Dilan Campbell and Alexander Larsen published a document titled ‘Bitcoin and the Energy Transition: From Risk to Opportunities’.
The authors argue that while the first cryptocurrency is perceived as a risk due to its high energy consumption, it could lead to new solutions to global problems in this area.
The researchers emphasised the important role of energy in the development of civilisation and the need for reliable, clean and more affordable sources of energy.
Despite criticism of Bitcoin’s energy intensity, Campbell and Larsen presented a balanced view, showing potential benefits from mining.
They argue that mining the first cryptocurrency opens at least seven opportunities to improve the energy sector.
The cryptocurrency mining industry could cut global methane emissions in flares by 8% through converting the greenhouse gas into less harmful substances during industrial combustion, the experts say.
In particular, the authors highlighted the following potential benefits of mining for the sector:
- increasing the efficiency of power grids, thanks to the decentralisation of cryptocurrency miners and their ability to respond quickly to demand;
- accelerating the deployment of wind and solar generation — miners can balance consumption;
- improving the economics of nuclear and hydroelectric plants through the purchase of surplus electricity;
- heat recovery.
“We have shown that, although bitcoin is an energy consumer, that does not mean it is a major source of carbon dioxide and other atmospheric pollutants. Cryptocurrency can become a catalyst for a cleaner and more energy-secure future for all,” the researchers said.
Bitcoin mining produces 0.1% of global CO₂ emissions, according to the Cambridge Centre for Alternative Finance.