Bitcoin Mining Alone Could Raise Global Temperatures Above Critical Limit By 2033
A recent UN climate report said that if global temperatures rose above 1.5 C it could lead to catastrophic climate change. Bitcoin alone could raise global temperatures by 2 C within two decades.
A Bitcoin miner in New York. Image: Motherboard/Daniel Oberhaus
If Bitcoin is adopted at rates similar to other technologies, like credit cards, it could increase global temperatures by two degrees Celsius by 2033 according to a study published on Monday in Nature Climate Change.
To put this in perspective, a recent climate change report from the United Nations found that a temperature increase of over 1.5 degrees Celsius would lead to irreversible, catastrophic climate effects.
Bitcoin requires massive amounts of energy to run the computers that secure the record of transactions that have occurred on the network, which are stored in a digital ledger called a blockchain. Each computer is simultaneously searching for the solution to a complex math problem—a process known as mining since the first computer to solve the problem is rewarded with newly-minted Bitcoin.
Bitcoin’s environmental footprint has been a serious point of criticism for years, mostly thanks to the work of the Dutch economist Alex de Vries. De Vries’ work has long lived on his blog Digiconomist, and more recently in Joule, a peer-reviewed academic journal. As Motherboard has previously reported, de Vries’ research has found that Bitcoin’s energy consumption likely roughly equivalent to the energy needs of Austria and may be more resource intensive than mining gold.
Yet even de Vries was surprised by the new research, which suggests that Bitcoin’s success could mean bad news for everyone on Earth.
“This is another pretty shocking find relating to Bitcoin's energy consumption,” de Vries told me in an email. “We already knew the electricity demand was extreme, but we didn't yet have a clear picture of the environmental impact of this.”
To reach this conclusion, a team of researchers at the University of Hawaii combined several relevant data points, including the efficiency of Bitcoin mining hardware, the probable location of the miners, and how much carbon dioxide is produced to create electricity in the miners’ countries.
Based on this analysis, the researchers determined that Bitcoin generated 69 million metric tons of CO2 last year. To put this in perspective, that is a little over one percent of all CO2 emissions from energy production globally. This is a huge energy budget considering that Bitcoin accounted for just 0.03 percent of all cashless transactions globally in the same time frame, according to the study.
To predict Bitcoin’s environmental footprint in the future, the University of Hawaii researchers looked at the adoption rates of other new technologies, such as credit cards and dishwashers, in the United States. These technologies were selected based on their incredibly rapid adoption, as was the case for credit cards, or their slow uptake, i.e. dishwashers. If Bitcoin is adopted at the average rate of these technologies, according to the study, it could produce enough emissions to warm the planet by two degrees Celcius in just 16 years. Even if it follows the slowest adoption rate, it will reach this same threshold within 22 years, the researchers concluded.
"We cannot predict the future of Bitcoin, but if implemented at a rate even close to the slowest pace at which other technologies have been incorporated, it will spell very bad news for climate change and the people and species impacted by it," Camilo Mora, a geographer at the University of Hawaii and the lead author of the study said in a statement.
It is important to note that these predictions assume that the ratios of fuels and renewables used to generate electricity will stay the same in two decades. Massive adoption of renewable energy around the globe, or for cryptocurrency mining specifically, could mitigate the climate effects of Bitcoin. Another possibility is that Bitcoin decreases in value to the point where it is totally unprofitable to mine, so the problem solves itself.
"Bitcoin’s energy consumption and carbon footprint heavily depends on mining revenues," de Vries told me. "If revenues don’t grow, electricity consumption won’t grow.”
As for clean energy, the authors of the study point out that its adoption by the Bitcoin community will be driven by the same market considerations that already determines where a Bitcoin mine will be built.
Since Bitcoin was first unleashed on the world a decade ago, massive Bitcoin mines— basically warehouses filled with specialized computers—have started cropping up in places where energy is cheap, usually near hydroelectric power stations. Most Bitcoin mines are located in China, but a few have cropped up in the United States and Canada as well. In some cases, these mines are so large that they use the same amount of electricity as the town they are located in, much to the ire of local residents.
If clean energy is going to be adopted by miners, rates for renewables will have to be below the price of non-renewable energy in these locales, which is often just a penny or two per kilowatt hour. Although the price per kilowatt hour for solar power and wind power is rapidly falling, it may be years before they are widely deployed enough to make a dent in Bitcoin’s climate footprint.
Some cryptocurrency miners are already pushing for clean power, but de Vries isn’t certain renewable energy can mitigate the worst effects of cryptocurrency mining since renewable energy production is highly variable, but mining operations run at full power around the clock.
"With the ever-growing devastation created by hazardous climate conditions, humanity is coming to terms with the fact that climate change is as real and personal as it can be," Mora said in a statement. "Clearly, any further development of cryptocurrencies should critically aim to reduce electricity demand, if the potentially devastating consequences of 2°C of global warming are to be avoided."
Want to learn more about Bitcoin’s energy consumption? Check out Motherboard’s past coverage:
Cryptocurrency Miners Are Building Their Own Electricity Infrastructure (2018)