100 important questions about Bitcoin’s energy use and ESG impacts

Abstract

Bitcoin currently consumes about 0.4% of global electricity and some critics have argued that widespread Bitcoin production and adoption will exacerbate global warming. Bitcoin advocates, on the other hand, have been dismayed by critics’ apparent lack of willingness to scrutinize Bitcoin’s potential role in helping improve the economics of renewable energy investments, reduce net emissions from methane venting and flaring, increase electricity grid efficiency, and provide higher-order environmental, social, and governance (ESG) benefits. Given the disparate views, there is a pressing need to identify key knowledge needs regarding Bitcoin’s net energy use, carbon emissions, and direct and indirect ESG impacts. I used a variation on the ‘key questions’ horizon scanning approach to identify 100 questions that, if answered, could help provide credible evidence to support policy-makers’, investors’, and research funders’ decision-making on issues relating to the impact of Bitcoin production and adoption. The questions are distributed across 13 themes (Bitcoin energy use – the big picture; mitigating methane emissions; electricity grid transition; Bitcoin mining – site choices and costs; Bitcoin security; retail, institutional, and national Bitcoin adoption; governance; values and beliefs; inflation and discount rate; adaptive capacity; narratives; knowledge creation and communication; and social impacts). The breadth of knowledge required to answer key questions highlights the need to develop a prioritized research agenda, build research capacity, and encourage collaborative cross-sectoral and -disciplinary research. Defensible evidence for investors, regulators, and policy-makers needs to consider Bitcoin’s complex net impacts on energy use and ESG benefits.