There’s a lot of buzz these days about cryptocurrencies and the stellar rise of these blockchain-based digital currencies are a strong sign that cryptos are here to stay. But scientists and environment experts worry that bitcoin and other cryptocurrencies might pose a danger to the planet.
That’s because their blockchains require computers all over the planet to solve complex equations in order to verify transactions. That practice, called mining, by which new Bitcoins enter circulation and the ledger of transactions is maintained and validated and requires sophisticated and powerful computers to solve cryptographic puzzles and has been built around the “proof of work” principle.
Mining has been getting progressively more difficult and expensive over time because of the way the first crypto currency, Bitcoin, and the others that followed initially, were created. Moreover, cryptos consume enormous amounts of electricity and substantial electronic waste that “represents a growing threat to the environment”.
Electronic waste from crypto is piling up
The study published by scientific journal, Elsevier, states that the average life cycle of the powerful computers used to unearth the units of the world’s leading cryptocurrency was only 1.3 years.
“This is ‘extremely short’ compared to any other electronic devices such as iPhones. This means the mining computers’ processing power soon becomes obsolete. And the more bitcoin is worth, the larger the amount of electronic waste,” according to Alex de Vries, economist and report co-author.
The problem, critics say, is that all those calculations needed to solve the equations for mining cumulatively consume large amounts of electricity. Bitcoin already uses 149.63 terawatt hours annually, more than entire countries such as Malaysia and Sweden, according to the Cambridge Bitcoin Electricity Consumption Index.
Microsoft co-founder and global philanthropist Bill Gates recently said in an interview that bitcoin “uses more energy per transaction than any other method known to mankind.”
It’s difficult to determine exactly how much of that electricity is generated by burning coal and gas, whose emissions contribute to climate change. But since nearly two-thirds of the world’s total electricity is produced by plants that use fossil fuels, it’s not hard to imagine how some cryptocurrencies increasingly could contribute to climate change.
A study published in the journal Nature Climate in 2018 concluded that the growth of bitcoin could produce enough emissions by itself to raise global temperatures by 3.6 degrees Fahrenheit (2 degrees Celsius) as soon as 2033.
Seeking alternatives to protect environment
As Cryptocurrencies trigger global warming and create greater environmental disaster, it has become the topic of heated debates between cryptocurrency advocates and those who want them banned.
Critics point out that the CO2 and heat generated by crypto currency mining is far more than any gains that one gets from emission reductions of electric vehicles (EV) being used around the world.
Bitcoin mining and that of other similar cryptocurrencies were particularly bad for the environment until even a couple of years ago because the miners primarily used power from plants using coal.
Many of the crypto currency mining hubs – many of them in the US and China – are using the cleaner hydro power, a number of miners depended on thermal power plants too. Also, increasingly miners have been relying on green and renewable energy rather than thermal power.
Most miners are working in areas where energy is generated using solar, wind, hydro and even flared natural gas of oil wells. While these do not cut out emissions altogether, there has been a concerted effort by the crypto currency champions to utilize energy that is both cheap and has a lower carbon footprint.
Even Ethereum, the second oldest and second most popular crypto currency is coming out with version 2.0, which will drastically cut down its carbon footprint.
Experts envisage the shifting of all crypto currency activities to clean fuels and become net zero carbon emission by 2040. The problem is that while it has supporters, many of the older and more popular cryptocurrencies have yet to sign up for it.
The issue is that using green energy for cryptocurrency mining alone doesn’t solve the entire problem. Even when clean energy or renewable energy like solar is used, the sheer power needed by the computers generates enormous heat.
That brings us back to the fundamental problem that crypto mining also adds to the pile of electronic waste that needs to be disposed of. And the fact that cryptocurrency mining becomes more difficult and requires more computing power every year creates its own set of environmental hazards.
Crypto advocates suggest that eventually a solution acceptable to all will be found. Apart from transiting to green energy, crypto miners will also play a role in grid balancing and flexible demand-response services, said the research study. Meanwhile, environmental scientists plan to keep a close watch on the crypto mining industry.
Legislators and policymakers should inform themselves now and act soon to stop the counterproductive growth of this industry. If they do not, they may have to face the consequence – and the day may not be far away.