How bitcoins are bad for the environment

Cryptocurrency requires higher electricity usage, which ultimately ups the risk of carbon footprint

Bitcoin and similar blockchain technologies consume more electricity than entire nations, and may prevent the world from achieving the climate change mitigation targets under the Paris Agreement, a study has warned. The study, published in the journal Energy Research & Social Science, evaluates the financial and legal options available to lawmakers to moderate blockchain-related energy consumption and foster a sustainable and innovative technology sector.

Researchers recommend an approach that imposes new taxes, charges, or restrictions to reduce demand by users, miners, and miner manufacturers who employ polluting technologies, and offers incentives that encourage developers to create less energyintensive/carbon-neutral blockchain.

“Digital currency mining is the first major industry developed from blockchain, because its transactions alone consume more electricity than entire nations,”said Jon Truby, an assistant professor at Qatar University. “It needs to be directed towards sustainability if it is to realise its potential advantages,” said Truby.

“Many developers have taken no account of the environmental impact of their designs, so we must encourage them to adopt consensus protocols that do not result in high emissions,” he said. “Taking no action means we are subsidising high energy-consuming technology and causing future blockchain developers to follow the same harmful path,” he added.

Bitcoin’s system has been built in a way that is reminiscent of physical mining of natural resources – costs and efforts rise as the system reaches the ultimate resource limit and the mining of new resources requires increasing hardware resources, which consume huge amounts of electricity.