Sun Sentinel Palm Beach Edition

Digital money may be a drain

Cryptocurr­encies’ outsized use of energy threatens to damage the environmen­t

- By Hiroko Tabuchi

The stock market debut of Coinbase, a startup that facilitate­s the buying and selling of cryptocurr­encies like Bitcoin, is a watershed moment for digital money.

It also threatens to lock in a technology with an astonishin­g environmen­tal footprint.

Cryptocurr­encies use blockchain technology, which relies on specialize­d computers racing to solve complex equations, making quintillio­ns of attempts a second to verify transactio­ns. It’s that practice, called “cryptomini­ng,” that makes the currencies so energy-intensive.

Researcher­s at Cambridge University estimate that mining Bitcoin, the most popular blockchain-based currency, uses more electricit­y than entire countries like Argentina do.

“All this accounts for so little of the world’s total transactio­ns, yet has the carbon footprint of entire countries. So imagine it taking off — it’ll ruin the planet,” said Camilo Mora, a climate scientist at the University of Hawaii at Manoa.

Mora argued in a controvers­ial 2018 paper that Bitcoin emissions alone could push global warming above the Paris Agreement target of 2 degrees Celsius, a level beyond which scientists warn the world will experience evermore-catastroph­ic effects of climate change. (Some of the paper’s assumption­s have since been called out as implausibl­e.)

Still, cryptocurr­encies’ heavy environmen­tal toll is starting to roil climate policy.

In a new paper published this month, researcher­s warned that, if left unchecked, Bitcoin mining in China — where an estimated two-thirds of the world’s blockchain mining takes place — could make it difficult for the world’s largest polluter to meet its climate goals.

Coinbase, on its website, calls the notion that Bitcoin is bad for the environmen­t a “myth.” It points to finance-industry research that calls the digital currency’s energy consumptio­n trivial compared to traditiona­l banking. But though their use is surging, cryptocurr­encies still account for just a fraction of global transactio­ns.

Alex de Vries, who keeps track of the use on the site Digiconomi­st, estimates that each Bitcoin transactio­n requires tens of thousands of times more electricit­y to process than each Visa credit card transactio­n, for example.

Bitcoin mining’s heavy energy usage owes in large part to its reliance on what’s called “proof of work” — a computing method that’s intentiona­lly designed to be inefficien­t to keep currencies transparen­t and decentrali­zed.

Proof of work forces miners to compete to solve cryptograp­hic puzzles in an intense race of trial and error, their computers together making more than 160 quintillio­n attempts a second to produce a new block. This competitio­n keeps immense numbers of computers working at top speed, around the clock and all over the world.

“The mechanism of proof of work is kind of counterint­uitive,” said Susanne Köhler, a researcher at Aalborg University in Denmark who has carried out life-cycle analysis of blockchain technology.

“While the machines are getting more efficient, the network does not reduce energy consumptio­n,” because an ever-growing number of miners must compete, making an ever-growing number of guesses, she said.

 ?? RICHARD DREW/AP ?? Coinbase employee Daniel Huynh holds a bottle of Champagne as he takes a picture Wednesday outside the Nasdaq MarketSite in New York’s Times Square. The digital currency exchange became a publicly traded company earlier this week.
RICHARD DREW/AP Coinbase employee Daniel Huynh holds a bottle of Champagne as he takes a picture Wednesday outside the Nasdaq MarketSite in New York’s Times Square. The digital currency exchange became a publicly traded company earlier this week.

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