Everyone's talking about Bitcoin and its rapidly increasingly value. Over the last few days, the cryptocurrency's price soared, passing $19,000 for one Bitcoin before falling back below $16,000.
While most people are just wishing they'd had the foresight to buy into Bitcoin when the exchange was still less than $50 to one (before early 2013), some environmentalists are raising alarm bells about the cryptocurrency's negative environmental impact.
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The reason? Bitcoin is "mined" using computer processing power, meaning as the cryptocurrency's value surges, more and more energy must be consumed. According to an analysis by Digiconomist, if Bitcoin's total energy consumption were calculated and compared to countries, it would currently be on par with Oman, Morocco, Serbia, Denmark, Belarus and Bulgaria, requiring about 32.6 TWh per year.
And, according to experts, as the cryptocurrency's mines have grown rapidly, they haven't turned to renewable or more efficient energy sources. In fact, quite the opposite has taken place, as miners aim to lower costs while using more and more power.
Cambridge University in the United Kingdom conducted a study earlier this year, revealing that nearly 60 percent of Bitcoin mining happens in China, where cheap and dirty energy sources are more readily available. The study compared the development of Bitcoin mines to "an arms race," saying that miners are turning to the "cheapest energy sources and the most efficient equipment to keep operators profitable."
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"In just a few months from now, at bitcoin's current growth rate, the electricity demanded by the cryptocurrency network will start to outstrip what's available, requiring new energy-generating plants," climate expert Eric Holthaus wrote, according to The Independent.
"By July 2019, the bitcoin network will require more electricity than the entire United States currently uses. By February 2020, it will use as much electricity as the entire world does today."
However, some Bitcoin enthusiasts have suggested that estimates of Bitcoin's energy consumption have been overblown. Although admittedly, they are still extremely high.
Marc Bevand, an investor and entrepreneur, told VOX that he was skeptical of high-end energy consumption figures. He suggested they were closer to half of what Digiconomist reported.
Back in 2013, a writer for Forbes referred to the energy argument as "desperate." He went on to point out that while the cryptocurrency's carbon footprint may be high and is increasing rapidly, the number of Bitcoins available to be mined is limited. Only 21 million will ever be available under current protocols, with over 16.7 million already mined.
"At some point Bitcoin mining will stop. There is an upper limit to the number that can ever be mined ... Thus this energy consumption will not go on rising forever," the writer said.
Others have suggested that Bitcoin mining will necessarily become more energy efficient moving forward, as miners will look to cut costs as much as possible. Digiconomist also suggests new algorithms, which require less power to mine, could be implemented in the future. Such algorithms are already in development, although they have not yet been proven successful.
Guillaume Chapron, an ecologist at the Swedish University of Agricultural Sciences in Riddarhyttan, has also posited that the technology underlying Bitcoin – blockchain – may actually have significant potential to conserve energy and protect the environment if implemented on a greater scale.
Writing in Nature earlier this year, Chapron said: "Bitcoin demonstrates that banks and governments are unnecessary to ensure a financial system's reliability, security and auditability."
"For sustainability, Blockchain technology could be a game-changer. It can generate trust where there is none, empower citizens and bypass central authorities. It could also make existing institutions obsolete, including governments, and raise fierce opposition. Laws could be replaced with 'smart contracts' written in computer code."
Despite cryptocurrency defenders and those touting Bitcoin's and blockchain's potential benefits to society and the environment, the rapidly increasing carbon footprint can't be ignored.
With more than 15,000 scientists from around the world warning earlier this year that it would soon be "too late" to save Earth from the effects of climate change, there is certainly ample reason to take a hard look at the real world environmental impact of Bitcoin.
