Green crypto research
At any particular moment, thousands of computers around the world are humming away, crunching complex math problems that create and sustain bitcoin. This network gives bitcoin its appeal: decentralized, always on and easily tradeable. But it also means the network is constantly using energy — a sticking point for many of the cryptocurrency's skeptics and critics. And it's not just a bitcoin problem. Other cryptocurrencies and blockchains including Ethereum have similar challenges. The debate about bitcoin's environmental impact was elevated earlier this month when Tesla CEO Elon Musk , once one of the most notable bitcoin boosters, said his company would no longer accept it for the purchase of vehicles.
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- Get your weekly G+S fix
- How Much Energy Does Bitcoin Actually Consume?
- Blockchain for United Nations Sustainable Development Goals (SDGs)
- Can Crypto Go Green? How to Invest in Eco-Friendly Cryptocurrencies
- Blockchain and Sustainable Growth
- Can a “green Bitcoin” help solve cryptocurrencies’ sustainability problem?
- Bitcoin is Key to an Abundant, Clean Energy Future
- A Systematic Overview of Blockchain Research
- Cardano (blockchain platform)
- Bitcoin mining isn’t nearly as bad for the environment as it used to be, new data shows
Get your weekly G+S fix
But in life, many things are actually not what they first seem. This is one of those things. In fact, it is not only not what it seems. It is the exact opposite. First, we need to establish some contextual groundwork.
This is a critical step, because lack of clarity on what Bitcoin is and is not, has the potential to muddle an entire subsequent analysis. In that light it seems stupid. But as soon as you know the thing is meant to fly into space, everything immediately makes a lot more sense.
Next, we need to understand the role of electricity in the Bitcoin settlement system. Electricity comes at a cost, and we therefore need to make sure we understand what Bitcoin gives in return for this expense. Who are the people actually paying for this electricity, and why are they willing to do so? These are important questions. Then we need to consider that the concept of waste is subjective. While I personally think the energy directed by our society at following and broadcasting the life of the Kardashians is an utter and total waste, others disagree and their choices are none of my business.
We have elected to live in a society where people are free to make their own choices, and there are good reasons for that. Far from being a blocker of a decarbonated future, Bitcoin mining can play an invaluable part as a building block in such a system.
It is actually an incredible opportunity for us to increase the share of intermittent renewable generation in our electricity grids, without ruining the economics.
Energy consumption is the key to our prosperity and progression up the Kardashev S cale. It is in our interest to consume more energy not less. And when applied to the overall picture, that depth just might cause a significant shift of perspective. Bitcoin is a settlement system like FedWire, it is not a payments aggregator like Visa. Most bitcoin transactions are not visible. They take place inside the payment aggregation systems of exchanges, on the Lightning network, and yes, even inside of actual aggregators like PayPal, Square, or MasterCard.
Only periodically are they settled onto the Bitcoin blockchain as visible transactions. Solutions like this are referred to as network layering.
This is a tried and tested approach to separating casual retail transactions from heavier settlement transactions and it is exactly how we already do things in the fiat monetary and payment systems. In such a system, the base layer , like FedWire or Bitcoin , only acts as the final arbitrator of settlement transactions, everything else, and that is the vast majority of all transactions, happen in higher payment aggregation layers, which are often entirely different systems.
Bitcoin is an independent monetary system that aggregators can make use of. As you probably know by now, Bitcoin adds new transactions to its ledger every ten minutes or so. Network-wide agreement on this single shared transaction history is what allows a decentralised monetary system to exist.
Without it, we need a central authority to decide which transactions came in what order. Electricity enters the picture during the block addition process. He called it a timechain. This model of decentralised agreement is so revolutionary within the field of computer science that it has been named after the creator of Bitcoin. It is called Nakamoto Consensus and the technique used to achieve it is called Proof-of-Work. In this process, the electricity does the actual work , and the proof is the presentation of a rare hash function output which could only have been found by repetitive guesswork, proving the input of work.
For those who remember high school physics, work is a time-dependent concept. If work has been done, time must have passed. Via this fundamental relationship, Proof-of-Work enables the Bitcoin network to cooperate on a decentralised clock, which is what enables its otherwise uncoordinated participants to agree on a shared history of transactions.
The consideration by all network participants of the chain with the most accumulated work as the correct and agreed-upon chain is a fundamental consensus rule of Bitcoin. Using Proof-of-Work as a decentralised clock also generates an excellent side-effect.
It makes counterfeiting and record tampering prohibitively costly. Writing a fraudulent history is as costly as writing a true one, and so in order to create a dishonest timechain, a malicious actor must expend more energy on the task than the entire honest network combined. Now this is actually a bit of an understatement, but for a global, freely available, politically independent monetary system, the ability to resist country-sized attackers is an incredible and obviously necessary feature, not some bug that needs fixing.
If your answer to that is no, then no argument would suffice to convince you that Bitcoin is anything other than a complete waste, whether it consumes one GWh per year or a million. However, in such a case there should also be nothing to worry about: If Bitcoin serves no purpose and is a bubble, then surely no one will be willing to pay its electricity costs over time and it will die, taking its consumption with it. Problem solved, no? If on the other hand the answer is yes, the story is quite different.
Because in return for its electricity consumption, Bitcoin provides a set of unique monetary properties to its users—properties that cannot be replicated by politically dependent monies nor by physical commodity monies. I could go on, but it should be clear at this point that the utility of such a system is enormous, the global market for its services is huge, and the energy required to run it is the necessary cost of achieving these properties.
Some people value mascara, others value junk food, others value watching the Kardashians, others again value flying to exotic places for their holidays, and yet others value going to stadiums to watch grown men in spandex pretend to fight.
But guess what, all the above things require energy. Which, then, shall pass our threshold for waste vs. Which ones shall we suggest is morally reprehensible on the basis of its wastefulness?
Nowhere else in our society do we apply similar scrutiny to the moral legitimacy of energy usage. Neither in private consumption nor in the production of goods or services. And there is a good reason for this.
Try to take the premise to its necessary consequence. If this is to be an approach to reducing our carbon footprint, where exactly do we draw the line? Who gets to decide? And how long until you find yourself dragged into the streets and put up against the wall for some unspeakable consumption crime?
In fact, perhaps those who feel righteously indignant about [whatever product or service], and consider it another consumerist evil to be morally assaulted, should have a long hard think about the effects of a global deflationary money on mindless credit-driven consumerism and its detrimental effects on the environment.
The latter two of which amount to an outright dismissal of the possibility that others might value something differently than yourself, or the belief that your value judgements are somehow more important than theirs.
It is not even possible to argue against any such positions. They are either based on lack of comprehension which must first be rectified, or on fundamental disagreements about individual freedom and liberty. What on the other hand is quite easy to understand, is why this is such an emotional issue in the first place. This is where people tend to get hung up. Pretty much everyone agrees that carbon pollution is a serious problem, and the fear of causing significant damage to the ability of our species to sustain itself within the bounds of our planet is a cause for worry in a lot of people.
Being a highly transparent system, it is therefore relatively easy to have a surface-level look at Bitcoin, calculate its power consumption, realise that it is significant, and then become fearful of its environmental impact. The problem with this type of approach however, is that it tends to conflate dirty electricity production with agnostic electricity consumption, while simultaneously and necessarily disregarding any and all utility. Well, yes and no.
These sources happen to be largely composed of stranded or otherwise underutilised renewables, particularly hydro power. And while its use of renewable energy is not by any means exclusive, it is still somewhere between double and quadruple the global residential, commercial and industrial average. So while Bitcoin might use the same amount of electricity as the Netherlands, its comparative carbon footprint would be somewhere between half and a quarter.
The other critical thing to understand is that Bitcoin is as green as an electric car. Nothing about Bitcoin requires emissions.
It will take whatever electricity you feed it. If the world goes green, so does Bitcoin. What detractors are effectively doing then, is dressing our carbon pollution problem up in a Bitcoin costume, shouting profanities at it and beating it with a stick. This is not an effective strategy for reducing our emissions, it is completely unhelpful scapegoating. Barring a reversion to pre-electricity technological eras or otherwise reducing our standard of living, the only strategy that can achieve that end is building out more renewable generation.
Rather than decrying Bitcoin as some archetypal representative of our carbon pollution problem, we really should be paying closer attention here because as it turns out, Bitcoin mining can actually be a critical building block in a carbon-minimised future. Underproduction and the common necessity of fossil fuel powered generation is something pretty much everyone understands because it represents the standard situation in nearly every place on Earth.
In such areas we require a standby capacity of fossil fuel power plants to step in when renewable generation and power consumption happen on different schedules.
This is less than ideal and drives up the cost of electricity. We cannot decide when the wind or clouds show up so we can never match the pattern of wind and solar generation to our power usage. This means that if we are to mainly, or at the very least , significantly rely on such generation we need to build out enough capacity that the lowest level of intermittent renewables production is at or higher than our peak demand.
Unless we can find a buyer for this electricity such a system would simply not be economically viable. In what is by now the worst kept secret of the industry, Bitcoin mining actually offers an incredible opportunity to optimise renewable-heavy grids. Miners, being supremely mobile and flexible, can act as demand response systems. They can sit right near the renewable resource even moving with the seasons in question — avoiding the need to excessively beef up grids — and dynamically consume excess energy whenever more is being produced than the non-mining market needs meaning prices are low.
This allows for immediate monetisation of energy that would otherwise be wasted, driving down overall electricity costs. In other words it can act as a monetary battery. Conversely, whenever electricity production is low compared to the needs of the non-mining market meaning prices are high , miners can be contracted to shut down, directing the electricity to other sources of demand who are also in general willing to pay more.
This ensures reliability for critical infrastructure when production is strained or demand is unusually high. One can only wonder if the recent Texan grid strain may have been alleviated if peak power production capacity was higher, a goal which is much more economically feasible in the presence of a large demand response capacity.
A similar dynamic is taking place on the other side of the world, in China. Over the last 20 years, China has built out the largest capacity of hydro electric power generation in the world.
Much of this capacity is concentrated in the mountainous southwestern provinces of Sichuan and Yunnan which receive both river runoffs from the vast Tibetan Plateau, and copious, but seasonal rainfalls.
How Much Energy Does Bitcoin Actually Consume?
Today, Bitcoin consumes as much energy as a small country. This certainly sounds alarming — but the reality is a little more complicated. How much energy does an industry deserve to consume? Right now, organizations around the world are facing pressure to limit the consumption of non-renewable energy sources and the emission of carbon into the atmosphere. As cryptocurrencies, and Bitcoin in particular, have grown in prominence, energy use has become the latest flashpoint in the larger conversation about what, and who, digital currencies are really good for. On the face of it, the question about energy use is a fair one. This certainly sounds like a lot of energy.
Blockchain for United Nations Sustainable Development Goals (SDGs)
By Felicity Bonello. From the way we buy, sell, bank and book dinner reservations right through to the way we consume entertainment, the internet has been behind an evolution in behaviour ever since it became available to the public in But just as we wrap our collective heads around our various relationships with technology, the internet goes and throws cryptocurrency, NFTs and a big question around their environmental impact at us. While not every cryptocurrency has a huge environmental impact, when the BBC reported that Bitcoin consumes more energy in one year than Argentina, it was hard to deny that many do have a notoriously high carbon footprint. While calculating the total environmental impact of mining and NFTs is not yet clear, the experts all agree on one thing; their overall carbon footprint is enormous. Many businesses have issued their own currencies called tokens and as of November over different cryptocurrencies were trading publicly. What we do know however, is that digital mining is a major factor in carbon dioxide emissions.
Can Crypto Go Green? How to Invest in Eco-Friendly Cryptocurrencies
Nowadays, Bitcoin is facing many environmental problems arising from the proof of work based on blockchain. The big data used in this study includes two sources. The second data were extracted from the Twitter application. This research explores the perceived ease of use, the perceived usefulness, the social influence, the perceived control and the user attitudes toward BITG.
Blockchain and Sustainable Growth
A nonprofit, independent media organization dedicated to telling stories of climate solutions and a just future. To say that the cryptocurrency known as Bitcoin eats a lot of energy is an understatement. In response, green-minded geeks have launched a batch of competing cryptocurrencies that take aim at the seemingly insatiable source of energy consumption that comes with Bitcoin mining, the proof-of-work system. Grist thanks its sponsors. Become one. To support our nonprofit environmental journalism, please consider disabling your ad-blocker to allow ads on Grist.
Can a “green Bitcoin” help solve cryptocurrencies’ sustainability problem?
Producer, director, actor and politician Kamal Haasan is set to become the first Indian celebrity to have his own digital avatar in a metaverse. Choose your reason below and click on the Report button. This will alert our moderators to take action. Nifty 17, Policy Bazaar
Bitcoin is Key to an Abundant, Clean Energy Future
A group of Japanese banks and corporations is forming a system to digitise bank deposits, creating a blockchain payments network. The system neatly circumvents a number of thorny questions about the legal status of stablecoins as well as exploring creative uses of the technology, like green certificates for clean electricity. It has subcommittees already investigating creative use cases for programmable money. The forum is exploring how its initiative, tentatively titled DCJPY, can contribute to the fight against climate change by providing cryptographic proof that electricity purchased on energy trading markets was cleanly produced.
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Cardano (blockchain platform)
For years, bitcoin critics have maligned the world's biggest cryptocurrency for polluting the planet. But new data from Cambridge University shows that the geography of mining has drastically changed over the last six months, and experts tell CNBC this will improve bitcoin's carbon footprint. For one, it took half the world's bitcoin miners offline practically overnight. Fewer people mining has meant less machines running and less power being consumed overall, which slashed bitcoin's environmental impact. Beijing's new crypto rules also permanently took a lot of older and more inefficient gear offline. And crucially, China shutting its doors to crypto mining has set off a massive migration.
Bitcoin mining isn’t nearly as bad for the environment as it used to be, new data shows
But in life, many things are actually not what they first seem. This is one of those things. In fact, it is not only not what it seems.