Climate change and the legitimacy of Bitcoin

Abstract

This 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.