The Bitcoin is the Hummer of speculative vehicles; let's hope it doesn't make it to its Bar Mitzvah.
On 31 October, 2008, someone calling him or herself Satoshi Nakimoto published the Bitcoin White Paper, which started the Bitcoin craze. Since then Bitcoin has grown like mad, burning tons of terawatts of electric power. It's not a bug, but a feature; as Alex Hern of the Guardian explained,
Now a new paywalled study published in Nature Climate Change concludes that Bitcoin emissions alone could push global warming above 2°C. A team at the University of Hawaii analyzed the power used for Bitcoin and according to the press release,
Burning huge amounts of electricity isn’t incidental to bitcoin: instead, it’s embedded into the innermost core of the currency, as the operation known as “mining”. In simplified terms, bitcoin mining is a competition to waste the most electricity possible by doing pointless arithmetic quintillions of times a second.
Researchers also studied how other technologies have been adopted by society, and created scenarios to estimate the cumulative emissions of Bitcoin should it grow at the rate that other technologies have been incorporated.
The team found that if Bitcoin is incorporated, even at the slowest rate at which other technologies have been incorporated, its cumulative emissions will be enough to warm the planet above 2°C in just 22 years. If incorporated at the average rate of other technologies, it is closer to 16 years.
There are a couple of problems with this analysis. First and most importantly, there is no guarantee that Bitcoin will grow in this Malthusian fashion. The price is way down, possibly because people are losing interest. According to the Bitcoin Energy Consumption Index, power consumption has been pretty flat for the last couple of months, although it is still consuming enough electricity to power 3.7 million US households.
Also, as Joe Romm notes in ThinkProgress, a lot of the global power sector is decarbonizing, which would reduce bitcoin's impact. It's why so much bitcoin mining is done in Iceland; electricity is clean and cheap there.
Miners don't like paying for electricity either; that's why some tried to steal it from Tesla. They are always working to get more computing for less power, and are getting more efficient.
In the end, Joe Romm says that "the most credible calculation for the current energy consumption by Bitcoin is just 0.1 percent of total global electricity — which is a long way from threatening the climate." This may well be true, but if any other consumer of electricity was sucking up 73 terawatts of electricity every year and emitting 35,830 kilotons of CO2, he wouldn't be so blasé. It is still a huge amount of electricity for something that is not particularly useful. Nobody needs this.
This study is pretty silly, and Bitcoin on its own will not kill us all. But that's no reason not to say that Bitcoin is the Hummer of speculative vehicles which serves no purpose that justifies its carbon footprint. Wish it a happy tenth birthday, but let's hope it doesn't live to celebrate its Bar Mitzvah.