I never bought into the Bitcoin hype, partly because I personally don’t believe the world is quite ready for the transition to a completely anational digital currency. But if you’ve read my column, you know I care about the intersection of environmental, political and financial issues. My issue with cryptocurrency extends beyond financial arguments. I have a problem with the blockchain technology itself: It requires too much electricity to be viable. All else aside, our energy economy isn’t prepared to support blockchain.
A recent study by the University of Hawaiʻi at Mānoa posits that “projected Bitcoin usage … could alone produce enough [carbon dioxide] emissions to push warming above 2 [degrees Celsius] within less than three decades.” Whatever the potential benefits of blockchain — according to IBM, these include efficiency, speed and security of transactions and ledgers — we simply cannot afford the electricity necessary from an environmental perspective.
While the study explicitly targets Bitcoin, I’d like to talk more generally about the underlying technology. The U.H. Mānoa team examined a number of factors when constructing their model, including the locations of Bitcoin mines — computer banks that process the digital ledger — and determined that though currently “emissions from transportation, housing and food are considered the main contributors to ongoing climate change,” blockchain technology should be added to this list. All told, Bitcoin mining in 2017 produced 69 million metric tons of carbon dioxide.
What this means, of course, is that our energy economy is nowhere near green enough to support electric currency — but we knew that. Cryptocurrency, whatever its issues, is becoming more widely used and will continue to be adopted in the coming decades as a method of transaction between individuals, companies and governments. So what can we do to prepare for that? How much energy do we need to meet the demands of this emerging currency system?
I’ve written before about the benefits of nuclear power generation and how it stands as our best short-term alternative to fossil fuels in our fight against human-caused climate change, but in the long run we need other options. One is the complete return to the cash economy, but that isn’t a solution. Another is the restriction of crypto to use for high-level transactions and large purchases. Yet another is to put crypto mining stations in orbit with their own solar arrays, but this would only be viable in the short term as well, since it doesn’t displace the entire energy structure to off-world systems.
But here’s another, better, more realistic solution: restrict cryptocurrency mining and use to clean energy grids. Ban the use of dirty energy for digital currencies until the rest of the grid catches up, and enforce the policy. We shouldn’t be so short-sighted: Both climate change and a currency revolution appear to be on the horizon. To reconcile the two, we must change and confront the environmental cost of the blockchain. Not only will we prevent Bitcoin from raising global temperatures, but by linking clean power and cryptocurrency, perhaps we can encourage a more rapid adoption of green energy technologies.