Bitcoin and other cryptocurrencies are often criticized based on the fact that mining consumes a lot of energy, and therefore contributes to the degradation of the environment.
"According to the Bitcoin Energy Consumption Index, Bitcoin mining globally uses about as much energy as the Czech Republic," noted a Forbes article on May 30. According to the author, sooner or later the world's governments will have to clamp down on the excessive energy consumption of bitcoin mining.
But perhaps doomsday predictions of environmental collapse caused by bitcoin mining are a bit, you know, exaggerated. Now Katrina Kelly-Pitou, a research Associate in Electrical and Computer Engineering at the University of Pittsburgh, has published a commentary that puts the issue in perspective, with a less alarmist tone.
Kelly-Pitou describes herself as: "I am a researcher who studies clean energy technology, specifically the transition toward decarbonized energy systems." Her background is a combination of environmental economics and power systems, and her PhD is in Energy Economics and Politics from the University of Nottingham. This shows that the researcher knows what she is talking about. Her conclusion: "I think that the conversation around bitcoin and energy has been oversimplified."
Kelly-Pitou argues that new technologies are often energy-intensive, but become more efficient over time. This is "a natural progression of any technology: Saving energy equates to saving costs." With renewable energy systems. electricity production can increase while still maintaining a minimal impact on the environment.
"Increasing energy consumption is bad only if we aren’t shifting toward less carbon-dense power production," Kelly-Pitou argues. Therefore, rather than worrying about how much energy bitcoin mining consumes, we should worry about how the energy is produced.
"Bitcoin is certainly consuming an increasing amount of power worldwide, but is it increasing the world’s carbon consumption? Bitcoin miners have traditionally set up shop in China, where coal supplies 60 percent of the nation’s electricity.
Another important consideration is that bitcoin mining is not the only - or the major - activity that consumes energy. Kelly-Pitou acknowledges that bitcoin mining consumed an estimated 30 terrawatt of power in 2107, which is a lot, but points out that banking consumes an estimated 100 terrawatts of power annually.
As Kelly-Pitou says, it's important to keep things in perspective. It's also important to switch the bitcoin mining industry to regions that offer clean, low-carbon energy at competitive prices. A conclusion that comes to mind is that China should switch from coal to cleaner forms of energy production, or bitcoin mining operators should be persuaded (with incentives of course) to move,
The fact remains that the Proof-of-Work (PoW) method used in bitcoin mining is very energy intensive. But other cryptocurrencies use less power intensive methods, and perhaps future versions of bitcoin itself will follow suit. It's worth noting that legendary software developer Bram Cohen, the inventor of BitTorrent, is working on a new cryptocurrency, optimized for low power consumption, which would offer "green money for a digital world."
Picture from Pixabay.
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Crypto Insider Editor Giulio Prisco is a writer specialized in science, technology and business. He is persuaded that crypto has the potential to bring disruptive positive changes to the internet and society at large.