Climate change and the legitimacy of Bitcoin
A working paper on my research into Bitcoin mining and climate futures is now available on SSRN.
The paper examines the ways in which Bitcoin miners are responding to external pressures associated with climate change and what this means for the legitimacy of Bitcoin. Using the experiences of four miners with very different energy use practices, the paper unpacks the various motivations and choices that underpin Bitcoin mining, including factors that can be obscured in economic and data models. Miners make decisions based on cost, local partnerships, the preferences of capital investors, energy market dynamics, technology upgrades, and the regulatory environment. In responding to these pressures and events, some miners are providing services and innovations that may help the viability of clean energy infrastructures for energy providers and beyond, including the data and computing industry. The paper finds that if Bitcoin loses legitimacy as a store of value, then it may result in lost opportunities to accelerate sustainable energy infrastructures and markets.
About me: I am a Professor at RMIT, working across the RMIT Blockchain Innovation Hub and the Digital Ethnography Research Centre. I am also an Associate Investigator (AI 🤖) of the ARC Centre of Excellence for Automated Decision-Making and Society. I acknowledge the support of the Australian Research Council, FT19010372.
Note on authorship: Ellie Rennie conducted the interviews and analysis contained in this paper, and wrote up the results. Campbell McNolty provided research assistance on this paper, including sourcing information from miners and drafting the section on consensus algorithms. He will be named as a co-author on the final version.