Bitcoin is far less popular now than it was in its heyday, when the world’s leading cryptocurrency was regularly dominating international headlines and leading newcomers into the burgeoning crypto-marketplace. After it caught on like wildfire amongst non-traditional investors, the Bitcoin hype also generated a slew of headlines and controversies surrounding the immense amount of energy that’s needed to mine - or generate - new tokens. These days, that controversy has largely died down, but many people still wonder if Bitcoin mining still presents a serious new global warming problem.
Was there any truth to the early concerns that Bitcoin was hastening global warming? How did industry experts and enthusiasts react to news that mining was consuming truly tremendous amounts of energy? Here’s what to know about Bitcoin and its contributions to the global warming problem.
Yes, mining does demand huge sums of energy
There’s no denying that mining Bitcoin, which really means verifying transactions in a somewhat tedious manner to earn small amounts of Bitcoin, requires a massive sum of energy that few individual Bitcoin enthusiasts could afford without breaking the bank. According to one report forwarded by the BBC, bitcoin mining at one point took up as much energy as was required by the entire country of Switzerland, according to a tool from Cambridge University. Mind-boggling headlines such as this was one reason among many that Bitcoin remained the world’s leading cryptocurrency despite the appearance of challenges like Ethereum and others which sought to supplant its popularity.
Many were concerned that consuming such a vast sum of energy - approximately 0.21% of the world’s energy supply at one point, per the Cambridge tool - would contribute to global warming. After all, such energy consumption almost always entails a carbon footprint, unless renewable energy methods were relied upon for the start. While it’s true that some crypto-enthusiasts argued that we needed to rely on sustainable energy sources to ethically mine cryptocurrencies like Bitcoin, it’s almost a certain matter of fact that many miners were relying on whatever local electricity supplies that they could tap into.
Oftentimes, those miners were likely willing to bend or even break ethical standards if it meant more efficiently churning out new tokens. According to one report from NBC, many Bitcoin miners were illegally tapping into the computers at their offices to mine cryptocurrencies without informing their companies ahead of time. This practice, labeled cryptojacking, was a major facet of the Bitcoin era when it was still regularly discussed in major headlines. The process was incredibly hard to detect at first, though many large companies and tech companies in particular doubtlessly took steps to crack down on it as it became more widely understood.
Few recent reports indicate how prominent crytpojacking is today, but the recent Bitcoin halvening that occurred earlier this year seriously diminished the reward that miners got for creating new tokens. This was to prevent inflation in the Bitcoin marketplace, as halvening have happened before and will likely happen again in the future to ensure that there’s no flooding the marketplace with too many new tokens.
Does Bitcoin really impact carbon emissions?
There were many skeptics who argued that mining Bitcoin in large numbers didn’t really negatively impact the process of global warming that’s perpetuating harmful climate change across the planet. Bitcoin enthusiasts at Coinbase, for instance, forwarded a somewhat misleading report indicating that the majority of energy - some 74 percent - used for mining Bitcoin was coming from renewable sources, though skeptics continued to insist that this was inaccurate. When it comes to how much energy overall that Bitcoin needs, one paper published in Joule effectively argued that “Bitcoin's annual electricity consumption adds up to 45.8 TWh” and that “[t]he corresponding annual carbon emissions range from 22.0 to 22.9 MtCO 2.” This is about as much, the paper says, as the nations of Sri Lanka or Jordan consume annually.
Nevertheless, obtaining accurate information on how Bitcoin is impacting global warming is genuinely incredibly difficult, if only because it’s extraordinarily hard to accurately determine where Bitcoin miners are drawing their energy from. An analysis conducted by the New York Times asserts that creating “a single digital token consumes at least as much electricity as the average American household burns through in two years,” which it determined on the basis of figures that were from Morgan Stanley and an independent economist named Alex de Vries.
Mining on a small scale is also effectively unprofitable, which is why Bitcoin miners of merit have to have huge computer operations established in order to succeed. The BBC took a glimpse inside of a secret Chinese Bitcoin mine established in a warehouse, and determined that the operation was created as much as $8 million in Bitcoin every year. The vast majority of Bitcoin mining operations are likely far smaller, but still must be large enough to merit the huge sums of energy they consume. This is why many individual Bitcoin miners who lacked extensive resources relied upon the practice of cryptojacking in Bitcoin’s heyday.
Assessing the cost to the planet
Global warming is a serious threat to the vibrancy of life on planet Earth. A Siberian town in the Arctic reported record heat waves in excess of 100 degrees Fahrenheit recently, and the observable effects of climate change are already diminishing both human life and wildlife in every corner of our world. Annual wildfires are far worse, burning brighter and longer than ever before, with pollution levels continuing to rise in major urban areas.
There’s no denying that Bitcoin mining is contributing to global warming, given that it consumes more energy than many nation states, but this is not to assert that Bitcoin is a predominant cause of global climate change. The bulk of the blame lies on our continued dependency upon fossil fuels like coal and oil, which remain popular in many nations despite continued improvements to solar and wind power technologies.
In the future, Bitcoin mining must depend more and more upon renewable sources of energy if it’s to be sustained in an ethical fashion.
