New research has proposed that Bitcoin if it grows at similar rates as other new-age technologies in their time, such as credit cards, could single-handedly raise global average temperatures by 2ºC by 2033.
Researchers at the University of Hawaii used data on the energy efficiency of current Bitcoin mining practices and the carbon footprint of electricity production in the countries where mining happens.
According to the study’s findings, Bitcoin mining alone contributed an estimated 69 million metric tonnes of CO2 last year. This amounts to roughly one percent of the emissions from energy production worldwide – for less than 0.05 percent of the world’s currency.
The study, published in Nature Climate Change, adds data and evidence to support concerns about the environmental footprint of growing cryptocurrency mining.
Where does energy get consumed in cryptocurrency?
The bulk of energy used by Bitcoin transactions goes into maintaining a secure digital record, the blockchain. The blockchain uses a network of computers to run its complex mathematical problems – or ‘mining’ – to verify one unit or ‘block’ of new transactions every 10 minutes.
This data is mined by ‘miners’ – people with expertise, software and hardware requirements to work with cryptocurrency.
Bitcoin mining is, by design, meant to consume more and more resources as time passes. Where earlier you could mine tens of thousands of Bitcoins with just a laptop, you will now need lakhs on bespoke hardware just to mine at a profitable rate. Some companies and individuals run server farms running some of the most powerful computer hardware around.
Concerns over Bitcoin’s energy consumption
Cryptocurrency miners consume large amounts of energy, and this energy is expensive – 90 percent of operating costs, according to reports. The growing industry spends 60 percent of its revenue on electricity bills, Alex de Vries, an economist, and blockchain specialist writes in the Digiconomist.
In the event that cryptocurrency grows to dominate the currency market someday, the network would likely grow with it. This would mean costlier coins, more computers, and more energy is used to mine.
“But the relatively new technology… like computers, trains, and automobiles (when they emerged)… is energy-intensive,” Katrina Kelly-Pitou, a researcher at the University of Pittsburgh studying clean energy technology, writes in the Conversation.
“Over time, all of these have become more efficient, a natural progression of any technology – saving energy equates to saving costs.”
However, in light of the recently-released IPCC report on Climate Change, time and temperature rise could be costly to the planet’s immediate future.
The report highlights the many drastic changes that can be expected from even an o.5ºC rise in global temperatures by the end of the 21st century.
“Reducing emissions to keep warming below 2ºC is already regarded as a very difficult challenge,” the new study says.
The study warns that cryptocurrency’s impact over the 16-23 years suggests that, like many other climate change contributors, it needs to prioritize curbing emissions – avoid adding fuel to a fire already proving difficult to put out.
“This is another pretty shocking find relating to Bitcoin’s energy consumption,” de Vries told Motherboard.
“We already knew the electricity demand was extreme, but we didn’t yet have a clear picture of the environmental impact of this.”