- A new study found that the bitcoin industry could push global temperatures above 2 degrees Celsius in less than two decades.
- The bitcoin trade produces the same annual carbon dioxide emissions from the US state of Arkansas.
- An increase in the temperature of this entity could alter the environment as we know it, causing disasters related to the climate such as droughts, tropical storms and sea level rise.
Bitcoin cryptocurrency has been touted by its advocates as a way to help solve our most pressing problems, from homelessness and human trafficking to cancer and the global financial crisis.
Bitcoin's ability to reduce fraud and security risks has made it one of the most transparent digital currencies on the market. Many see this as a critical step towards the responsibility of governments for carbon emissions and even for the development of a world carbon footprint reduction market.
But the currency also has a dark side. A new study by the University of Hawaii notes that if bitcoin is adopted more widely, the huge amount of electricity used to trade cryptocurrency could help push global temperatures above 2 degrees Celsius by 2033.
According to the Intergovernmental Panel on Climate Change (IPCC), a 2-degree increase in global temperatures could reduce water availability in some areas by up to 30%, making Arctic species vulnerable to the polar bear. extinction and subjecting another 10 million people to coastal flooding.
While bitcoin is not responsible for all emissions from heavy industries such as agriculture and transport, industry is releasing carbon dioxide at an alarming rate.
Like many forms of cryptocurrency, bitcoin is based on the heavy coal industry as a low-cost energy source.
While researchers recognize that they can not predict the future of bitcoin, which has a brief history of boom and failure cycles, they have developed a relatively conservative model: If bitcoin is adopted at a pace even close to the slower pace of key technologies like cars, credit cards or air conditioning, it may soon alter the environment as we know it, said Camilo Mora, lead author of the study.
If bitcoin continues to thrive, it could make the world even more vulnerable to climate-related disasters such as droughts, tropical storms and rising sea levels. Already, the IPCC expects the world to be on track to see a 1.5-degree increase in temperature by 2040. But bitcoin transactions could push these temperatures above the 2-degree mark even earlier than expected.
In short, industry could double the magnitude of current climate-related disasters, Mora said.
If the link between bitcoin and climate disaster sounds weak, consider how the currency is exchanged: to transfer a payment or make a sale or purchase, bitcoin uses a digital recorder called blockchain, whose records are verified by miners – an expensive process that it requires a lot of computer power.
For their study, the researchers examined the efficiency of computers used for bitcoin mining, where bitcoin extraction takes place all over the world and CO2 emissions from electricity production in those countries.
A recent report found that the electricity used for a single bitcoin trade can power a home for almost a month. Only in 2017, the use of bitcoin produced 69 million tons of carbon dioxide – about the same as the US state of Arkansas.
One way to reduce emissions is to slow down the process by accumulating more transactions per block (the file where the data is recorded). But this would reduce the speed and efficiency that made the bitcoin so effective.
Perhaps the most viable solution is that bitcoin recognizes the financial benefits of greater energy efficiency. But even then, the sector will have to act quickly.
"Right now, there's no reason to worry," Mora said. "[but if bitcoin] continues to grow, it could lose control fast enough. "