No, Bitcoin won't destroy our climate by 2033
Illustration: Sarah Grillo/Axios.
A new study predicts that a sharp increase in energy-hungry Bitcoin use will cause a surge in emissions of greenhouse gases, potentially dooming the world to an amount of global warming that would exceed the targets set under the Paris Climate Agreement.
Why it matters: Bitcoin has an energy problem, requiring high amounts of electricity to process transactions. Determining the implications of such energy use is of concern for climate scientists, particularly if this new currency takes off in popularity.
What they did: The study estimates that Bitcoin usage emitted 69 million metric tons of carbon dioxide in 2017, while accounting for just 0.033% of cashless transactions in the same year. They then project future emissions based on a variety of scenarios of growing Bitcoin usage in coming years.
The researchers, from the University of Hawaii at Manoa, found that Bitcoin could be responsible for greenhouse gas emissions sufficient to propel climate change past 2°C, or 3.6°F, above preindustrial levels within just the next 11 to 22 years.
- As the study, published in Nature Climate Change on Monday, notes, a lot of Bitcoin mining takes place in China and other parts of Asia, which currently depend on coal for a lot of their electricity.
- Therefore, if Bitcoin is increasingly utilized as a cryptocurrency, the authors project, emissions could skyrocket.
But, but but... The study makes a number of questionable assumptions, experts said. For example, the projections assume that the fuel types used to generate electricity will remain the same as they are today.
- This ignores the rapid rise of renewables worldwide and phaseout of carbon-intensive coal plants from many countries.
- They also didn't take into account the likelihood that Bitcoin mining will migrate between countries, potentially shifting from nations with a more carbon-intensive electricity base, like China, to cleaner ones, such as Iceland or the U.S.
- Also, accurately predicting future use of a novel technology is difficult, and many observers expect Bitcoin to serve more as an investment vehicle than a currency.
What they're saying: Northwestern University’s Eric Masanet, who specializes in energy modeling, called the new study “fundamentally flawed,” in a statement.
“While the future growth of cryptocurrencies like bitcoin is highly unpredictable, we do know that the global electric power sector is decarbonizing and that information technologies — including cryptocurrency mining rigs — are becoming much more energy efficient. It appears the authors have overlooked these two latter trends in their projections, while simultaneously insisting on tremendous growth in cryptocurrency adoption, resulting in inflated and dubious estimates of future carbon emissions.”— Eric Masanet, Northwestern University
Similarly, Lawrence Berkeley National Lab research scientist Arman Shehabi tells ThinkProgress that the study keeps certain factors the same while assuming a drastic growth in the use of Bitcoin. Shehabi noted that Bitcoin mining "has already increased efficiency by an order of magnitude or more in the last few years.”
Our thought bubble: The high energy costs and climate impact of Bitcoin mining is a legitimate ongoing concern, but specific predictions are only as good as the assumptions they're based on, and those assumptions — of rates of technology adoption, sources of energy, and efficiency of the applications — are very hard to nail accurately.
Scott Rosenberg contributed to this story.