Bitcoin’s popularity has a downside: It’s an energy glutton
Study finds that production may be hiking greenhouse gas emissions to dangerous levels
Bitcoin, the cryptocurrency that has taken world markets by storm, may already be driving greenhouse gas emissions equivalent to those of a midsize country, and a study released Monday said it could catapult the planet to dangerous levels of warming if it continues its rapid growth.
At least one critic cautioned that the new research “makes much too coarse and even wrong assumptions” — demonstrating that even as the cryptocurrency, worth about $6,400 per coin, grows in visibility, estimating precisely how it is affecting the environment remains hotly debated.
There’s no doubt bitcoin is notorious for its high energy use — the consequence of miners having to compute highly difficult problems to make a “blockchain” of transactions and win new bitcoin. This, in turn, requires high-powered, energyhungry equipment.
These miners are well known for flocking to places with cheap electricity so they can get a better return on mining. Sometimes, that means setting up near hydroelectric dams, in which case mining would not produce any greenhouse gas emissions. But in other cases, miners tap into electricity grids powered largely by coal plants.
Because bitcoin is a currency not maintained by banks but by a network of individuals, it relies on a technology called blockchain that is decentralized and depends on an enormous number of users, called miners, to compute a record of transactions.
The computer users who do the laborious calculations are paid in bitcoin, which encourages yet more computing. No single entity manages the entire system, which eats vast amounts of energy from computers constantly solving problems to build the blockchain.
The problem is that as the price of bitcoin rises, there is more incentive to mine. But the way bitcoin is set up, when this happens, the problems that must be solved also become more computationally difficult, requiring still more energy use.
The study, published in Nature Climate Change, seeks both to compute the current energy use of bitcoin mining and what it could be in the future if the technology expands. And it finds not only countrysize present-day emissions but potentially planet-size impacts from further growth.
“That to me was the mindblowing thing about this,” said Camilo Mora, a researcher at the University of Hawaii who published the work with his students. He computed present-day greenhouse gas emissions tied to bitcoin by analyzing the energy efficiency of the hardware that mining uses and the countries in which the mining groups are based — mostly China, but also the U.S. and several other nations.
The result of the calculation was that bitcoin, today, probably releases about 62.5 million tonnes of carbon dioxide emissions — comparable with the emissions of a country like Austria, which has a population of nearly 9 million people.
It’s a big deal for anything to be emitting at a country scale — and with the trouble nations are having cutting emissions, anything at this scale is nothing to sniff at. Still, with global carbon dioxide emissions at about 37 billions tonnes, bitcoin would represent just a fraction of the total.
But the study then compared a hypothetical future rate of bitcoin adoption to the history of technologies such as the credit card, the dishwasher and electricity itself, and it found that if bitcoin continues to catch on — and if computations to record transactions and generate new bitcoin become more complex — greenhouse gas emissions from the mining could explode.
But the new work is contentious and probably not the final word on the subject.
“Extrapolation using the other commonly used technologies will be speculative, but not unreasonable,” David Malone, a lecturer at Maynooth University in Ireland, said in an email. Malone previously calculated that bitcoin’s energy demand was equal to that of Ireland itself.
Challenges faced by bitcoin could limit its use, Malone noted, rendering the analysis less accurate.
“They talk a little bit about the problems that bitcoin has to overcome (for example, squeezing more transactions into a block and these might improve efficiency),” he wrote. “However, it is also possible that these limitations might limit bitcoin’s growth, and so limit the growth in CO2 emissions.”