Written By: - Date published: 9:09 am, November 1st, 2018 - 39 comments
Categories: business, capitalism, climate change, Economy, Environment, global warming, internet, sustainability, youtube - Tags: bitcoin
There is a rather simple way for the world to do something significant about climate change and global warming. All that we have to do is work out how to get rid of bitcoin.
Bitcoin’s electricity usage is enormous. In November, the power consumed by the entire bitcoin network was estimated to be higher than that of the Republic of Ireland. Since then, its demands have only grown. It’s now on pace to use just over 42TWh of electricity in a year, placing it ahead of New Zealand and Hungary and just behind Peru, according to estimates from Digiconomist. That’s commensurate with CO2 emissions of 20 megatonnes – or roughly 1m transatlantic flights.
That fact should be a grave notion to anyone who hopes for the cryptocurrency to grow further in stature and enter widespread usage. But even more alarming is that things could get much, much worse, helping to increase climate change in the process.
Burning huge amounts of electricity isn’t incidental to bitcoin: instead, it’s embedded into the innermost core of the currency, as the operation known as “mining”. In simplified terms, bitcoin mining is a competition to waste the most electricity possible by doing pointless arithmetic quintillions of times a second.
The more electricity you burn, and the faster your computer, the higher your chance of winning the competition. The prize? 12.5 bitcoin – still worth over $100,000 – plus all the transaction fees paid in the past 10 minutes, which according analysts’ estimates is another $2,500 or so.
This is a winner-takes-all game, where the prize is guaranteed to be paid to one, and only one, miner every 10 minutes. Burning more electricity increases your chances of winning, but correspondingly decreases everyone else’s – and so they have a motivation to burn more electricity in turn.
But it is not only bitcoin that is the problem. Internet data centres also are major contributors to energy consumption.
John Harris in the Guardian analyses the power consumption that occurs in Louden County, Virginia which houses many of the world’s major data farms. He states this:
But there is a big problem, centred on a power company called Dominion, which supplies the vast majority of Loudoun County’s electricity. According to a 2017 Greenpeace report, only 1% of Dominion’s total electricity comes from credibly renewable sources: 2% originates in hydroelectric plants, and the rest is split evenly between coal, gas and nuclear power. Dominion is also in the middle of a huge regional controversy about a proposed pipeline that will carry fracked gas to its power plants, which it says is partly driven by data centres’ insatiable appetite for electricity. Clearly, then, the video streams, digital photographs and messaging that pour out of all those servers come with a price.
I was reminded of all this by the recently published book New Dark Age, by the British writer James Bridle. He cites a study in Japan that suggests that by 2030, the power requirements of digital services will outstrip the nation’s entire current generation capacity. He quotes an American report from 2013 – ironically enough, commissioned by coal industry lobbyists – that pointed out that using either a tablet or smartphone to wirelessly watch an hour of video a week used roughly the same amount of electricity (largely consumed at the data-centre end of the process) as two new domestic fridges.
If you worry about climate change and a cause celebre such as the expansion of Heathrow airport, it is worth considering that data centres are set to soon have a bigger carbon footprint than the entire aviation industry. Yet as Bridle points out, even that statistic doesn’t quite do justice to some huge potential problems. He mentions the vast amounts of electricity consumed by the operations of the online currency Bitcoin – which, at the height of the speculative frenzies earlier this year, was set to produce an annual amount of carbon dioxide equivalent to 1m transatlantic flights. And he’s anxious about what will happen next: “In response to vast increases in data storage and computational capacity in the last decade, the amount of energy used by data centres has doubled every four years, and is expected to triple in the next 10 years.”
If we are going to get on top of climate change we are going to have to address power consumption. And burning so much power on keeping Bitcoin going and on streaming youtube videos may be something that we will need to rethink.