 So, I would present in the next 21 minutes, what's my limit paper that I jointly wrote with Lina Klassen and Uli Gallesterfer. So, Lina is a trained economist and Uli has trained computer scientists and my background is in environmental policy, climate modeling, energy system modeling. So the paper I'm presenting goes back to an idea. I saw a presentation about the energy consumption of Bitcoin back in 2015 at MIT and I was wondering what actually the climate implications are, because from a climate perspective electricity consumption per se doesn't matter, but carbon emissions do. And so the idea was born to actually calculate or estimate the carbon footprint of Bitcoin. The paper that came out of this research was then published last year in June in a journal called TUL and to be honest, we were quite surprised by the media attention that we received for this paper. So I think it was on Monday when we published the paper and the Sunday night before I received an email from the Guardian asking for an interview and I was quite surprised and then on the Monday when the paper came out, the university called me and told me that a German TV station wanted an interview and the entire thing escalated throughout the week. So at the end of the week I received an interview request from CNN and the statement on CNN in the end received more than 1.2 billion views and went through media global release and total we or not we but the press office of Munich counted more than 3 billion visits of the results of this paper, which is quite surprising that people actually care so much about 0.2% of global emissions, but things, but let's jump into the paper and have a look at what we actually did. So the plan for today would be to first answer the question why CO2 actually matters. As I mentioned, I'm a trained climate economist and my research focuses on climates rather than on Bitcoin. Second I would talk about how Bitcoin actually causes CO2, then present the results of our paper so what the current footprint of Bitcoin is and if we have some minutes left also look into how reliable such estimates are. So why does CO2 matter? On this chart you see the carbon dioxide concentration in the atmosphere and you can see on this chart that the concentration in the atmosphere has never been that high. Why does this matter? Because greenhouse gases cause global warming so you have a greenhouse gas effect the more greenhouse gases you have in the atmosphere and this warming is also not equally distributed globally. So on this chart number five you see the temperature anomalies over land and over sea and you see that over land heats up quicker than the sea and at current levels we are already close to 1.5 degrees warming compared to pre-industrial levels. Furthermore over land there's also distribution so if you look at the world map you see that especially around the poles there's even a higher temperature anomaly which kind of scares me considering how much methane and other stuff is tied up in thermophosphate. So what is the challenge now? So probably most of you are aware of the two degree target which was published or communicated after the Paris COP 21 in 2015. So the goal that global nations had to limit global warming below 1.5 or two degree warming and on this chart number seven you see how the emissions would actually have to develop to achieve this goal. So on the left side of the chart you see historic emissions so every year we emit more CO2 into the atmosphere and on the right part in this band you see how the emissions would have to develop if we want to achieve this 1.5 degree warming target and you see that basically we should or would have to reduce emissions immediately and arrive at net zero around mid-centuries around 2015. So that's quite a challenge and if you look at what is currently happening so during the corona pandemic emissions have dropped so it's the largest drops in second world war but still we are still on a level comparable to I think 2012-ish so that kind of shows how big the challenge is and we won't solve it by just behavior change but technology will play a major role in this challenge. So this is kind of the background why CO2 actually matters. Now you might be wondering what has Bitcoin to do with all of that. Easy answer. First of all Bitcoin how it's made and probably most of you know how it works in detail so the validation algorithm that validates transactions and ownership requires a computational intensive process and for this computational intensive process you need specific hardware so typically ASIC mining devices are used recently and those consume electricity and the more you have of those so that's a picture from a mining farm in Iceland the more you have obviously the more electricity you need to run those and electricity depending on the source can translate into emissions. So the next question is then what is actually the emissions caused by the electricity consumption of these mining activities and our research approach was the following. So first of all we wanted to calculate the power consumption of Bitcoin and then multiply it with the carbon intensity of the electricity used to derive the carbon footprint. So it looks quite simple but the devil is in the detail of collecting all the data that is needed to derive this result. So for instance key inputs to derive the power consumption are the hardware and use and the manufacturers of mining devices are typically quite sensitive with that data and you also need to know how efficient these operations are so depending on the size of mining if you have a small mining farm compared to a large one you have auxiliary losses or you have less auxiliary losses and on the carbon intensity side that's the tricky part you need to understand which carbon emission factor actually to apply for the electricity. So for the electricity consumption I won't go through that in detail but this was our basic approach to calculate an upper and a lower bound so we assumed for a upper bound of electricity we assumed that the miners use all their revenues to buy electricity and for a lower bound we assumed all miners to use the most efficient hardware and we also calculated the best guess which included further assumptions and which we consider as our best guess scenario so this was the approach it's a three-fold approach to estimate electricity consumption and there were a lot of information which we needed to actually do so and we were quite lucky because during the time we conduct the study three major producers of ASICs announced their IPOs so their initial public offerings which required them to publish data which they hadn't done previously and so based on their IPO filings we could estimate which hardware they actually had sold which gave us information on the efficiency of the hardware used in the network which allowed us to derive the electricity consumption. We had a few further inputs to do so so one was the pool size and so from pool shares we derived the size of the single miners and we also conducted a bunch of interviews to understand how mining operations actually work so that's that's a screenshot from a data scraping we did on slush pool which probably some of you know so this is a mining pool and we recorded the hash power contributed by single users to classify miners into three size buckets so small miners medium miners and large miners and depending on the size of mining operations we included PUE's a power utility effectiveness so meaning auxiliary losses so simple example if you mine at home you can open up your window you don't need additional cooling if you have a large mining farm you need cooling and if you have a very large mining farm your cooling will be more efficient than in a medium-sized mining farm so this was the basic idea behind that one so this chart shows the distribution of the PUE's in the Bitcoin network at the time end of 2018 and we classified these PUE's to say for instance private PUE's were then classified as large-scale mining because they were typically privately owned mining PUE's and that was how we derived electricity consumption which you see on that chart so these are the lower bound so the technological lower bound the economic upper limit in our best guess estimate which was 45.8 terawatt hours annually at that point in time end of 2018 so now the second part of the calculation interesting one in order to translate electricity consumption into carbon emissions you need to know where your electricity is consumed and we applied we calculate three scenarios to actually derive the geographic footprint of Bitcoin mining so our first approach was based on server IPs so PUE server IPs so we recorded and monitored the data that was provided by mining PUE's to derive a distribution between Asia Europe and America second we used device IPs so we used a IoT search engine called Shodan IO to actually localize mining IPs and so IP addresses of mining devices with a certain configuration and our third approach which we didn't use in the paper in the end was to set up our own node in the network and record the blocks that were related based on the scenario that we derived we then wanted to calculate the carbon emissions and this one is actually tricky so it looks quite simple so to calculate the carbon emissions from electricity consumption you need to know how carbon intensive your electricity is and here the challenge begins depending on which lens you take so you can say for instance I mine next to a renewable power source so I'm mining next to a wind farm I am renewable or you could say from a system perspective I'm consuming the average carbon intensity of the electricity in a respective grid or you could say I'm causing with my mining additional load and the marginal emissions that I cause are the coal-fired power plants the last one in the merit order that is actually added to fulfill my load and that is quite tricky and that's also where the discussion starts and there are a lot of gases out there which deviate quite a lot and from so we took the system perspective and used an average emission factor in the end to derive our results which was then 22 megatons of CO2 annually which is comparable to a major city so I think with Kansas City as an example that emits a similar amount of carbon so how reliable are such estimates as I already mentioned the challenge is to get the emission factor right because if you assume mining next to a renewable energy source is carbon-free then your carbon footprint is much lower if you take the perspective of mining is adding loads to the grid then you end up with a much higher carbon intensity so that's quite challenging and you could also ask so what now you calculated the carbon emissions so what there are much larger sources of carbon emissions definitely and this research was also the starting point to look into other data centers that require more electricity etc so it's I think it's a nice example to see that technology technological innovation also requires looking at externalities and the conclusion here is not that we should ban bitcoin or regulate mining or something like that but it shows the general problem so from an economic perspective the most cost-effective way would be to use a carbon price to actually internalize the externalities that reside from these carbon emissions and the problem is not bitcoin per se but the problem as I mentioned at the beginning of my talk is the general greenhouse gas emission level having said that I think I'm quite close to the 21 minutes and I would stop my presentation at that point thanks