A study has revealed that, by 2033, global temperatures could spike by 2°C from the emissions produced through Bitcoin mining alone. The research paper was published in the peer-reviewed environmental journal, Nature Climate Change.
The study by the University of Hawai’i at Manoa noted that if Bitcoin (BTC) adoption continues at the same pace at which other technological inventions were adopted, it may be among the major factors accelerating climate change.
Bitcoin, like many other cryptocurrencies, is a digital currency that exists through encryption. The process of purchasing and exchanging Bitcoin requires large amounts of electricity.
The decentralised cashless payment system was introduced in 2009. Now, it has been adopted by more than 100,000 merchants and vendors across the world as an investment and payment system. This is mainly because Bitcoin is more secure and efficient than other forms of money.
Bitcoin mining uses large amounts of electricity
Bitcoin requires heavy hardware which translates into huge electricity consumption, said Randi Rollins, who co-authored the study.
Years after the study was published, El Salvador and the Central African Republic adopted Bitcoin as legal tender despite warnings from international lenders.
Bitcoin transactions are processed by a set of people called miners. When Bitcoin transactions are made, miners group them into blocks, which are then added to the chain, hence the term “blockchain”. That constitutes the public ledger. They then carry out a verification process to decipher the proof-of-work which can be exchanged for bitcoins.
It is known that the electricity requirements for Bitcoin mining, the process that safeguards the Bitcoin network, have created considerable difficulties and heated discussions about where to put the families that compute the proof-of-work of bitcoin. However, the environmental impact of producing all the electricity needed is less discussed.
Bitcoin mining uses more power globally every year than most countries
Bitcoin mining uses more power globally every year than most countries. Each bitcoin transaction is said to consume 707 kWh. To put this into perspective, a study found that a single Bitcoin transaction requires enough energy that can power an average American household for about 73 days.
An analysis by the University of Cambridge estimates that bitcoin mining consumes about 121 terawatt hours a year. The computers employed in mining consume more energy due to the heat they generate and the need to keep them cool.
Bitcoin mining persists despite climate change warnings
Despite these warnings, mining is a lucrative business, with miners earning as much as $111,000 for each mathematical equation solved.
Producing bitcoin at the pace of growing demand threatens to defeat the aim of limiting global warming to under 2°C. These demands have created extensive discussions around the considerable difficulties in deciding where to station the facilities that compute the coin’s proof-of-work.
The process of trying to solve the mathematical equations that could earn miners a bitcoin involves a trial and error phase. It is like trying out different keys to unlock a password. There are an estimated 1 million miners currently in existence. This means that hundreds of thousands or more computers are churning out guesses at every moment to solve a mathematical equation.
A team of researchers from UH Manoa analysed the geographical location of the miners who computed through Bitcoin, the power efficiency of computers used in Bitcoin mining, and the carbon dioxide emissions of generating electricity in those countries.
The researchers also studied how society has so far adopted other technologies. Using this data, they created models to estimate the cumulative emissions of Bitcoin if it grew at the same rate as other technologies.
Based on the data collected, their research estimated that in 2017 alone, Bitcoin mining emitted 69 million metric tons of carbon dioxide. That year, bitcoin was involved in less than 0.5% of the world’s cashless transactions.
As cryptocurrency becomes more widely used, even as bitcoin mining is becoming more energy efficient, within a decade, bitcoin could consume enough electricity to emit about 230 gigatons of carbon.
Scientists sound alarm about environmental effects of cryptocurrency
Following their research, what the team found was alarming. The team discovered that if Bitcoin is adopted even at a rate as slow as some of the most slowly adopted technologies, its aggregate emissions will be enough to warm the planet above 2°C in only 22 years. If that rate is at par with the average rate of other technologies, the timeline shortens to 16 years.
Scientists warned in 2018 that efforts to slow down climate change could be derailed by cryptocurrency mining. Over the years, these warnings have fallen on deaf ears as the cryptocurrency’s dramatic ascent has launched a multi-billion dollar industry.
Human needs such as transportation, food and housing are considered the main drivers of climate change. The scientists warned cryptocurrency mining may be added to the list.
The increasingly popular digital currency takes enormous amounts of energy to produce. One way of possibly reducing the emissions of Bitcoin is to learn ways to buy BTC in under 10 minutes.
If the potentially devastating consequences of global warming are to be avoided, the development of cryptocurrencies needs to focus on ways to critically reduce electricity demand. Otherwise, it will be bad news for climate change and all species affected by it.