Researchers predict that if more energy-efficient measures are not put into place soon, Bitcoin mining will push us over the recommended global temperature limit in as early as 11 years.
Ten years ago, the Bitcoin concept seemed too good to be true to the general public. Many couldn’t believe that such a simplistic system of unregulated, universal online trade would work. Others believed that it was a scam, with some industry experts even predicting its inevitable collapse.
Bitcoin is a form of cryptocurrency; a supposedly secure, protected, and digital medium of exchange. No single government or central bank controls it, and its value depends on supply and demand, not on any underlying assets. In other words, it does not exist as tangible money in the real world.
The cryptocurrency’s pseudonymous creator Satoshi Nakamoto, whose real identity remains a mystery, described it in his 2008 essay as “a purely peer-to-peer version of electronic cash” that “would allow online payments to be sent directly from one party to another without going through a financial institution.” He then released the software as open-source code in 2009. It has since grown in popularity across the world, with many investors and “miners” itching to get their slice of the Bitcoin pie.
For reference, a Bitcoin is currently equivalent to about Php 341,000. The Central Bank of the Philippins (Bangko Sentral ng Pilipinas, or BSP) acknowledges the existence of virtual currencies, and has also warned the public to deal only with BSP-registered licensees. Only registered virtual currency licensees have the authority to convert real-world currency into cryptocurrency. As of September 2018, there are six virtual currency licensees in the Philippines.
In a nutshell, Bitcoin is stored and managed in a decentralized digital network. Transaction data comes in blocks — digital ledgers, basically. After verification, the blocks connect to form blockchains, ensuring their security.
Verifying these transactions, however, requires rapid, massive, and complex computations — the kind achievable only through massive servers running 24/7. Unfortunately, running such huge servers requires significant amounts of electricity.
For this reason, Bitcoin is leaving a “huge ecological footprint,” according to lead author Camilo Mora, an associate professor from the University of Hawaii. Mora and his co-authors placed Bitcoin-related carbon dioxide (CO2) emissions at a whopping 69 million metric tons in 2017.
Additionally, the researchers compared how other disruptive technologies (such as credit cards and electricity) progressed over time. Based on their findings, at the rate Bitcoin is going, it would only take between 11 to 22 years to push global temperatures beyond the critical 2-degree-Celsius limit scientists have set for the planet.
Just a bit part?
However, CoinMetrics.io co-founder Nic Carter believes that the report was way off-base. According to Carter, for the study to make sense, each block must be 3.2 GB in size, with newly minted Bitcoins issued on a regular basis. To date, the largest block ever mined was over 2.2 MB, roughly three weeks ago.
Furthermore, proponents claim that the total number of Bitcoins is set in stone, all of which will eventually be mined and issued.
Meanwhile, climate change researcher Eric Masanet characterized the study as “deeply flawed.”
In an email to The Scientist, Masanet wrote that “the global electric power sector is decarbonizing and that information technologies—including cryptocurrency mining rigs—are becoming much more energy efficient.” Masanet, who heads Northwestern University’s Energy and Resource Systems Analysis Laboratory, added that the authors “[may] 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.”
In other words, the dire conditions described in the study require three things. Bitcoin use must increase significantly, current mining systems should not become more efficient, and the world must continue to rely heavily on electricity.
One must consider, though, that widespread adoption of Bitcoin isn’t a given at this point. Experts believe it is likely to remain as an investment vehicle rather than an actual currency. Meanwhile, renewable energy sources (such as solar energy) are increasingly becoming affordable. Plus, mining is being migrated to countries with government-subsidized (such as China) or greener (such as Iceland) energy sources.
Keep the change
Nevertheless, the researchers stressed that discrediting the cryptocurrency wasn’t their main objective.
“Emerging technologies and industries need to take their potential footprint into consideration, and make smart decisions for development, being aware of the consequences of emission production,” said Randi Rollins, study co-author. “Green, sustainable energy would allow Bitcoin to continue, as is, without the repercussions we outline in our paper.”
Author: Mikael Angelo Francisco
Bitten by the science writing bug, Mikael has years of writing and editorial experience under his belt. As the editor-in-chief of FlipScience, Mikael has sworn to help make science more fun and interesting for geeky readers and casual audiences alike.