ANALYSISBy Climate Change Jeffrey Gogo
A common mainstream media narrative is how bitcoin mining consumes a lot of coal-generated electricity, thereby fuelling climate change. Much less is said about electricity usage involving legacy, monopoly financial institutions like commercial banks.
This bias is confirmed by a recent study that has received worldwide coverage from an equally conflicted Press. In the study, researchers at University of Hawaii at Manoa examined how the rapid increase in the use of cryptocurrency like bitcoin would harm the climate. They came to the conclusion that in two decades, bitcoin mining could be pushing global warming above 2°C, becoming just as bad as the energy and transport industries.
The virtual currency has gained widespread use throughout the world, including Zimbabwe, both as a store of value against fiat currency volatility and inflation, as well as in domestic and cross border financial settlements.
However, bitcoin mining – a process that creates new digital coins by solving complex mathematical problems using very powerful computers, day and night, non-stop – has been accused by environmental campaigners for using too much electricity, causing climate change to worsen.
The Hawaii University researchers support this view. In the study, the scientists compiled data on the use 40 different technologies “ranging from dishwashers and e-books to electric power and the internet. They used this information to estimate the rate of uptake this cryptocurrency will see in the coming years.”
In the best case scenario, bitcoin use will cause global temperature rise to tip the 2°C threshold within 22 years, the researchers said, which is much faster than what the Paris Agreement on climate change is looking at. Paris intends to keep temperature rise well below 2°C in this century, mainly through renewable energy the use. If the average uptake of bitcoin adoption is used instead, the 2°C limit will be bust in 16 years, the researchers said.
Because cryptocurrency mining is a process that is computationally demanding, utilising expensive top-end computers to workout solutions for the cryptographic transactions, it is not always easy for scientists to come up with accurate and reliable estimates on bitcoin’s carbon footprint.
The Hawaii University researchers tried to get around this problem by analysing “the power efficiency of computers used in bitcoin mining, the location of miners around the world and the CO2 emissions from electricity in those countries.”
But it does not help their cause that for comparison they settled for household electric utensils like dishwashers. As currency that challenges the existing global financial order, it follows that for any credible analytical research, bitcoin mining should be placed in comparison with that which it seeks to directly challenge – the legacy financial system, which is dominated by commercial banks and central banks.
It should be critiqued on the basis of electricity usage from other competing financial offerings or payment options such as ZimSwitch or mobile money platforms like Ecocash, Telecash and OneMoney each year. Anything else, like dishwashers, will be flawed. Oranges and apples!
Dr Katrina M Kelly-Pitou is a researcher at the University of Pittsburgh’s Department of Electrical and Computer Engineering.
In August she published an article titled “Stop worrying about how much energy bitcoin uses” which appeared on The Conversation, a not-for-profit outlet for content sourced from academics and researchers. In it she takes to task the notion that mining is inherently energy wasteful and thus dangerous to the environment.
Regarding the oft-cited estimation that mining used 30 terrawatt hours in 2017 – as much as Ireland – she explains: “This is a lot, but not exorbitant. Banking consumes an estimated 100 terrawatts of power annually. If bitcoin technology were to mature by more than 100 times its current market size, it would still equal only 2 percent of all energy consumption.”
“Not all types of energy generation are equal in their impact on the environment, nor does the world uniformly rely on the same types of generation across states and markets,” she explains, adding that, “perhaps people should quit criticizing bitcoin for its energy intensity and start criticising states and nations for still providing new industries with dirty power supplies instead.”
God is faithful.