Published on December 10th, 2017 | by Tina Casey0
Bitcoin Power Problem Seeks Renewable Energy Solution, May Not Find It Fast Enough
December 10th, 2017 by Tina Casey
Back in 2013, CleanTechnica’s Joshua Hill spotted the environmental problem lurking behind the Bitcoin unicorn, and now it looks like the global warming chickens are finally coming home to roost. Bitcoin is the hottest digital currency in the emerging crypto-economy, but the energy required to accumulate it is skyrocketing. Low-carbon advocates are planting red flags all over the place as the implications for carbon emissions and global warming become clear.
What CleanTechnica Said About Bitcoin In 2013
For those of you new to the topic, Bitcoin can be described as a democratized version of conventional financial institutions. A decentralized network of Bitcoin volunteers verifies, records, and completes your transactions anywhere on the globe.
Also entering into the equation is blockchain, which provides a cradle-to-grave, unalterable record of each transaction. Theoretically that provides Bitcoin transactions with built-in fraud prevention, which is part of the attraction (visit our new bff over at HackerNoon for many, many more details about blockchain and digital currencies).
Hill wrote his 2013 CleanTechnica article under the title, “Bitcoin’s Environmental Problem.” The energy issue is directly related to the nature of Bitcoin itself:
“…mining for Bitcoins is a mathematical process conducted on necessarily increasingly more powerful computers. A successful search will yield a ‘block’ of data, a Bitcoin ‘hash’.”
The lucky “miners” can use bitcoins for themselves, hold them and hope they rise in value, or sell them to others.
The open market price for bitcoins has recently spiked up. Though the price fell sharply at the end of last week, the longer trend is comparable to a gold rush in terms of environmental impacts, as Hill explains:
…when gold was first discovered, all you needed was a pan and patience. As time went on, and gold started becoming rarer, the technology needed to extract more and more gold increased.
The same goes with Bitcoins, as the computational power required to complete a successful search for a Bitcoin hash continues to increase…
What Everyone Is Saying Today
The problem that Hill described four years ago has come to a head today. Among the many energy observers to remark upon Bitcoin’s power problem, last week our friends over at GreenTech Media pointed out that the Bitcoin Energy Consumption Index over at digiconomist.net puts the annual global energy consumption of Bitcoin at almost 32 terawatt-hours (the site is down as of this writing but snapshots may be available).
As described by GreenTech, that’s equal to or more than the annual energy consumption of 159 other nations including at least one in the developed category, Ireland.
Bitcoin activity has increased exponentially in recent months. If it continues to rise at the current rate estimated by Digiconomist, Bitcoin energy consumption will outrun the entire USA by 2019 and the world — that would be every nation on Earth — by the following year.
Putting The Brakes On Bitcoin
So, will Bitcoin energy consumption continue to rise at the current rate?
Our friends over at Wired point out that other Bitcoin energy estimates vary widely. Although Digiconomist’s figures are among the most widely cited, they may be overstating the energy problem.
In any case, solutions are at hand. GreenTech outlines a number of pathways that Bitcoin miners are pursuing to reduce their carbon footprint.
Increasing the efficiency of specialized Bitcoin mining hardware is one factor. Switching to a more energy efficient algorithm would also take a lot of the heat off, although that will take some time to develop and implement.
Renewable energy is another near-term option. GreenTech, for example, cites a Bitcoin miner in Iceland using geothermal energy.
CNN also took a look at the problem and found a miner in Vienna deploying hydropower. That solution is being deployed on a large scale in China, though the country’s coal power plants apparently still play a large role in Bitcoin power consumption.
Another Mouth At The Renewable Energy Trough
If climate action was simply a matter of incremental action, Bitcoin and other cryptocurrencies would have no power problem.
After all, other big players in the digital world — Google, for example — have begun switching to 100% renewable energy.
The cryptocurrency movement could even help provide investors with incentive to plow more funds into renewables.
That’s all well and good, except that years of delay on climate action have culminated in a crisis. Here in the US alone, 2017 has been marked with the predicted impacts of global warming, including two devastating hurricanes and swarms of wildfires.
Meanwhile, longstanding energy problems — transportation, manufacturing, buildings, and power generation — are still crowing for renewable energy attention.
If cryptocurrencies can continue to grow while also helping to accelerate the broader low-carbon transition, that’s great.
Simply focusing more renewable energy dollars on mining Bitcoin, though, will do nothing to slow, let alone stop, rising global temperatures and their consequent impacts.