Bitcoin is a form of cryptocurrency that shot to fame in 2017 due to its surge in price from below $1,000 to nearly $20,000 on the CoinDesk Bitcoin Price Index (BPI). The spike was good news for those involved with the cryptocurrency and left those who weren’t involved curious. As of today, one bitcoin equals 5,586.01 United States dollars.
What is cryptocurrency? Simply put, it is a form of electronic cash that lacks a centralized bank or administrator. Therefore it allows for direct transactions between users without the need for intermediaries.
In application, bitcoin has many flaws. Criticisms of bitcoin include illegal interactions, high electricity consumption associated with use, price volatility, thefts from exchanges and the possibility of an economic bubble (trade at a price or price range that strongly exceeds the asset’s intrinsic value).
Scientists from the University of Hawaiʻi at Mānoa (UH Mānoa) came to the conclusion that if bitcoin is implemented like other technologies, it has the potential to produce large enough amounts of emissions to increase global temperatures by two degrees Celsius by the year 2033.
Randi Rollins, a coauthor of the paper, commented on why bitcoin uses so much energy.
“Bitcoin is a cryptocurrency with heavy hardware requirements and this obviously translates into large electricity demands,” Rollins said.
Purchases conducted with bitcoin are processed and tracked by “miners“ who sort the transactions into specific timeframes called blocks, which are subsequently added to the “chain,” or public ledger. Since bitcoin is based on a digital encryption system, it makes sense that hefty amounts of electricity would be necessary for operation.
This excessive use of electricity has generated discussion, but the environmental impacts have not been considered until now. The team at UH Mānoa analyzed various factors such as the power efficiency of computers utilized in bitcoin mining, the geographic location of miners and the carbon dioxide (CO2) emissions correlated with electricity production in those countries.
They estimated that the use of bitcoin in 2017 led to the emission of 69 million metric tons of CO2. The team also looked at the method of adaptation for other forms of technology and applied those rates to the hypothetical growth and incorporation of bitcoin. Even with adaptation rates at the lower end of the spectrum, bitcoin possesses enough emissions to warm the earth by two degrees Celsius in 22 years.
Katie Taladay, a UH Mānoa PhD student and another coauthor of the paper, had much to say.
“Emissions from transportation, housing and food are considered the main contributors to ongoing climate change. This research illustrates that Bitcoin should be added to this list,” Taladay said in a press release.
Camilo Mora, associate professor of Geography at UH Mānoa and lead author of the study, confirmed her colleague’s statement.
“We cannot predict the future of Bitcoin, but if implemented at a rate even close to the slowest pace at which other technologies have been incorporated, it will spell very bad news for climate change and the people and species impacted,” Mora said in a press release.
“With the ever-growing devastation created by hazardous climate conditions, humanity is coming to terms with the fact that climate change is as real and personal as it can be. Clearly, any further development of cryptocurrencies should critically aim to reduce electricity demand, if the potentially devastating consequences of two degrees Celsius of global warming are to be avoided.”
These findings display grim predictions. Though a movement to digital currency might sound like stuff of the future, maybe it is a better idea to hold off on cryptocurrency for now — when our planet is at risk.