According to a new study, the energy costs of mining Bitcoin alone could cause a 2-degree Celsius rise in global temperatures within 20 years.
Bitcoin might be promising a brave new world of financial freedom, but it’s also responsible for a huge spike in electricity use, so the new study has attempted to put a number on what this might mean for the environment.
Considering Bitcoin is just one of several emerging cryptocurrencies currently being processed on computers and servers the world over, it might get to a point where the environmental costs of these decentralised payment systems are in danger of outweighing the benefits.
Researchers from the University of Hawai’i at Mānoa crunched the numbers to come up with a projection of how much electricity Bitcoin might demand if the cryptocurrency starts to take off and gain more widespread appeal – and that 20-year estimate is a relatively conservative one.
If Bitcoin use gathers pace at the speed that emerging technologies like credit cards and smartphones did, the team reports, we could see a global warming of 2 degrees Celsius as early as 2033.
“Currently, the emissions from transportation, housing and food are considered the main contributors to ongoing climate change,” says one of the team, Katie Taladay. “This research illustrates that Bitcoin should be added to this list.”
If you’re new to Bitcoin, here’s how it works: the currency is stored and managed digitally across a decentralised network. This network, and the publicly-verified ledger of transactions that go with it (the blockchain), promise to make Bitcoin a secure and stable alternative to traditional banking – at least in theory.
However, verifying transactions on the blockchain requires a series of intensive computations: professionals today use huge racks of servers, running around the clock, to crack the required codes. The financial rewards can be substantial (Bitcoins are paid out for verifications), but the environmental cost is starting to add up.
The power required to validate a single transaction could be enough to supply energy to a home for an entire month, according to some calculations.
“Bitcoin is a cryptocurrency with heavy hardware requirements, and this obviously translates into large electricity demands,” says one of the team, Randi Rollins.
The researchers looked at the power efficiency of computers typically used to mine Bitcoin, the geographic location of Bitcoin mining operations, and the CO2 emissions involved in generating electricity in those countries.
The situation is already pretty bad: the use of Bitcoins in 2017 was responsible for some 69 million metric tons of CO2 equivalent emissions, the team worked out.
The team then looked at the growth of adoption for more than 40 different technologies – including TVs, dishwashers, the internet, radio, refrigerators and more – to work out how quickly Bitcoin could catch on.
Several cryptocurrency experts have taken issue with the team’s results, saying Bitcoin is unlikely to follow the growth path of other technologies and that the data is based on “naive assumptions”.
They have even labelled the study as “fake news”, pointing out that the total number of Bitcoins is fixed – that is, they will eventually have all been mined and issued.
There are plenty of other variables here too, including how electricity is generated from country to country, and how it’s used by Bitcoin miners.
So before that dire prediction of temperature rise pans out, we can hope initiatives to make cryptocurrency mining more sustainable in their energy use catch on.
As has also been pointed out, our current financial organisations use up plenty of electricity and other resources to manage and maintain transactions, too; but it’s still reasonable to not want any potential replacement to be worse.
“With the ever-growing devastation created by hazardous climate conditions, humanity is coming to terms with the fact that climate change is as real and personal as it can be,” says one of the team, Camilo Mora.
“Clearly, any further development of cryptocurrencies should critically aim to reduce electricity demand, if the potentially devastating consequences of 2 degrees Celsius of global warming are to be avoided.”
The research has been published in Nature Climate Change.