To any ardent follower or interested parties of cryptocurrency, it is common knowledge that the processes involved in ‘Bitcoin-ing’ consume a lot of power. For quite a while now, this has raised eyebrows in its direction on the cost of generating more power to sustain mining and trading. From its point of view, this is needed if Bitcoin is to replace the current fiat currencies. But what crypto lovers haven’t realized, or did realize but decided to keep mute, is the extent to which it could affect our climate.
According to results from a new study, it is estimated that between now and the next two decades, continuous Bitcoin mining, trading and activities could bring about a 2oC (35.6oF) increase in global temperatures. The accuracy of this finding is strengthened by results obtained from the research carried out by the University of Hawaii. In UoH’s findings, enormous amounts of electricity would be required should a worldwide adoption of Bitcoin take place.
The 2oC (35.6oF) global temperature increase would occur by 2033. This is because annually, Bitcoin trading emits approximately the same levels of carbon dioxide emissions (69 million metric tons) as that emitted by the state of Arkansas, USA. This was filed in a 2017 report for carbon dioxide emission which also showed that a single trade involving bitcoin consumed as much electricity as a home would in a month.
Although it may seem like a small number, but the effects of this temperature rise could be catastrophic to the environment. It would bring about a rise in global sea levels, droughts, increase the likelihood and frequency of tropical storms and other disasters related to climatic fluctuations. The Intergovernmental Panel on Climate Change (IPCC) has it that such rise could cause a 30% decrease in water in some places, increase the possibility of polar bears, caribou, and other arctic animals become extinct while so increasing the tendency of coastal flooding in other areas –putting about 10million more lives at risk. According to the IPCC’s prediction, temperature levels by 2040 would have increased by 1.5oC (34.7oF) but it is possible the 2o threshold is surpassed before then.
Since the advent of bitcoin and other digital currencies, it has received strong backing by investors and individuals. As such, it has assumed a Messiah-like status in the financial world due to its transparency and a significant reduction in fraud cases helped by lower security risks. It is believed to be a means to solving problems, asides the on-going financial crisis, ranging from homelessness to cancer and human trafficking. Also, it is being viewed as a way to ensure that governments remain accountable for and devise means to reduce global carbon footprint.
Currently, in the US, it can be argued that Bitcoin trading doesn’t produce as much carbon dioxide emissions compared to other pollution-heavy industries like transportation and agriculture. Despite this, Bitcoin, like other cryptocurrencies, rely heavily on the coal industry for cheap power generation. Over time, these carbon dioxide emissions add up and it is adding up, very fast.
Researchers have been unable to determine what lies ahead for Bitcoin due to its short history and fluctuations between boom and bust cycles hence, a conservative approach employed. One of the researchers and lead author of the study, Camilio Mora, said that “if the rate of adoption of Bitcoin is likened to the slowest pace of adoption of tech innovations such as credit cards or cars, the global climatic consequences would be felt sooner.” To drive home this point, he recalled the hurricane disaster [Hurricane Michael] in Florida which happened earlier in the year. If that could happen with a less than 1o warming, he said, the Bitcoin industry is set to double these occurrences.
If in doubt of these statements, one has to look at the processes involved in Bitcoin mining/trading. A blockchain, which plays the role of a record-keeper, requires huge computer power to process a transaction. What researchers like Camilio Mora do is to compare the CO2 emissions due to electricity generation in countries where Bitcoins are mined with how efficient the Bitcoin mining computers are.
An avenue to reducing these carbon emissions would be to carry out multiple transactions in one block. Consequentially, it would affect the efficiency rate and speed of transaction-processing Bitcoin is renowned for. The earlier the Bitcoin industry is able to utilize more energy-efficient methods and reap the financial benefits, the better. But, actions need to be taken immediately.
“Presently, there’s no cause for alarm,” said Mora, “but should Bitcoin mining/trading gain more popularity and adoption, it just may hasten doomsday.