A new study suggests that growth in the use and adoption of Bitcoin could damage the climate due to massive emission levels. Many experts disagree.
Cause for Concern
Researchers at the University of Hawaii claim that emissions due to the growth of Bitcoin could significantly impact the climate with rising global temperatures. The summary of the research paper, which was published on the Nature website, was reported by TheScientist earlier on Monday.
However, the claims have been refuted by other scientists, suggesting that the study is flawed by having ignored the likely future developments in technology like energy-efficient chips and the use of clean energy for mining.
How Does Bitcoin Usage Cause Emissions?
Bitcoin and other cryptocurrencies that use a proof-of-work consensus algorithm consume a lot of electricity. Bitcoin uses the decentralized ledger technology where the transactions are validated by nodes on the network and not by an intermediary like a bank.
The process of validating transactions involves solving complex mathematical problems and requires power-hungry mining machines. “Bitcoin is a cryptocurrency with heavy hardware requirements, and this obviously translates into large electricity demands,” said study co-author Randi Rollins.
The researchers estimated that the use of bitcoins in 2017 emitted 69 million metric tons of CO2. To extrapolate the growth in emissions, they assumed that adoption would increase at rates like those of innovations like credit cards or dishwashers.
The calculations led to the result that, in the next 11-22 years, Bitcoin-related emissions alone could cause a 2°C rise in temperature above pre-industrial levels and over the targets set under the Paris Climate Agreement.
The Counter-Arguments
Many experts argue that the assumptions made by the researchers may not hold up, reported axios.com. They may have ignored the following:
- Renewable energy sources like solar and wind power are on the rise, and carbon-intensive coal power plants will be phased out.
- The possibility of mining activity moving from carbon-intensive locations like China to cleaner locations like Iceland or Canada.
- The possibility of Bitcoin being used more as a store of value rather than for payments for which other cryptocurrencies with alternate validation mechanisms may be used.
Eric Masanet from Northwestern University, who has specialized in energy modeling, commented that the research was “fundamentally flawed.” He said:
While the future growth of cryptocurrencies like bitcoin is highly unpredictable, we do know that the global electric power sector is decarbonizing and that information technologies — including cryptocurrency mining rigs — are becoming much more energy efficient.
He further added:
It appears the authors have overlooked these two latter trends in their projections, while simultaneously insisting on tremendous growth in cryptocurrency adoption, resulting in inflated and dubious estimates of future carbon emissions.
Arman Shehabi, research scientist at Lawrence Berkeley National Lab, said that while the researchers assumed growth in the use of Bitcoin, other parameters were considered to remain constant. He noted that Bitcoin mining “has already increased efficiency by an order of magnitude or more in the last few years.”
While it is legitimate for environmentalists to be concerned about the massive consumption of power for Bitcoin mining, the technological developments in areas like chip design and renewable energy should be able to address such concerns. Like many other industries that were supposedly going to destroy the planet, cryptocurrency mining shows an increasing level of technology leads to much greater efficiency and far less impact than the doom-and-gloom crowd usually predicts.
What is your opinion about global warming due to Bitcoin mining? Let us know in the comments below.
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