Is Bitcoin contributing to Climate Change?
Cryptocurrency mining is very resource-intensive and requires large amounts of energy in order to solve complicated math puzzles within the blockchain technology.
Cryptocurrency miners typically use powerful computing capable hardware to increase the amount of coins in the market, but this can quickly skyrocket an electricity bill. This prompted a study to be released in Energy Research & Social Science stating that crypto-mining can derail any positive climate action under the Paris Agreement and that proper policies are needed to find a sustainable way for cryptocurrency mining to exist, with humanity’s attempt at curbing climate change.
“Despite digital currencies providing considerable potential transactional, security, and financial access benefits, the design of bitcoin’s mining and trading system requires such a vast consumption of electricity that it is equivalent to powering Denmark. This threatens the planet to the extent that intervention is necessary to prevent similar models emerging,” wrote John Tuby (associate professor of law and director of The Center for Law & Development at Qatar University).
According to the Bitcoin Energy Consumption Index, the annual electricity consumption stands at 73.12 TWh (a near 400% increase over the past 12 months) and according to the study, the process involved in a single bitcoin transaction could provide electricity for a home in Britain for an entire month.
Is the study missing a few important points about our energy infrastructure?
The 400% spike in energy consumption in the past 12 months is definitely alarming, if we’re serious about combating our climate’s changes. It would be better for the world if that amount of energy was not being used for crypo existence. It is important to bring up these points in order to make positive changes, but does the report project future emissions based on an idea that the energy resources are coming from non renewables?
World wide renewable energy production has topped 5.9 TWh since 2016. This represents a 5 fold increase since the 1960s. Renewable energy production in recent years has been consistently increasing. Carbon intensive coal plants from many countries are being phased out for cleaner renewable options.
Traditional biofuels have been decreasing since the 2000s and migrating cryptocurrency activity to countries that have a less carbon intensive infrastructure such as the United states and Iceland can further decrease the cryptocurrencies carbon footprint.
Either way, energy consumption needs to decrease. But it should be noted that future predictions are quite difficult to concretely set because of our global advancements in renewable energy.
“While the future growth of cryptocurrencies like bitcoin is highly unpredictable, we do know that the global electric power sector is decarbonizing and that information technologies — including cryptocurrency mining rigs — are becoming much more energy efficient. It appears the authors have overlooked these two latter trends in their projections, while simultaneously insisting on tremendous growth in cryptocurrency adoption, resulting in inflated and dubious estimates of future carbon emissions.” — Eric Masanet, Northwestern University