Bitcoin could cost us our clean-energy future
If you’re like me, you’ve probably been ignoring the bitcoin phenomenon for years — because it seemed too complex, far-fetched, or maybe even too libertarian. But if you have any interest in a future where the world moves beyond fossil fuels, you and I should both start paying attention now.
Last week, the value of a single bitcoin broke the $10,000 barrier for the first time. Over the weekend, the price nearly hit $12,000. At the beginning of this year, it was less than $1,000.
If you had bought $100 in bitcoin back in 2011, your investment would be worth nearly $4 million today. All over the internet there are stories of people who treated their friends to lunch a few years ago and, as a novelty, paid with bitcoin. Those same people are now realizing that if they’d just paid in cash and held onto their digital currency, they’d now have enough money to buy a house.
But the rise of bitcoin is also happening at a specific moment in history: Humanity is decades behind schedule on counteracting climate change, and every action in this era should be evaluated on its net impact on the climate. Increasingly, bitcoin is failing the test.
Digital financial transactions come with a real-world price: The tremendous growth of cryptocurrencies has created an exponential demand for computing power. As bitcoin grows, the math problems computers must solve to make more bitcoin (a process called “mining”) get more and more difficult — a wrinkle designed to control the currency’s supply.
Today, each bitcoin transaction requires the same amount of energy used to power nine homes in the U.S. for one day. And miners are constantly installing more and faster computers. Already, the aggregate computing power of the bitcoin network isnearly 100,000 times larger than the world’s 500 fastest supercomputers combined.
The total energy use of this web of hardware is huge — an estimated 31 terawatt-hours per year. More than 150 individual countries in the world consume less energy annually. And that power-hungry network is currently increasing its energy use every day by about 450 gigawatt-hours, roughly the same amount of electricity the entire country of Haiti uses in a year.