The fixation on the electricity that Bitcoin mining consumes is at time puzzling. The volume of studies and reports that mainstream media has published on the topic seems like it exceeds the number of pieces published on the electricity consumption of other industries. Nevertheless, the latest research paper on the amount of electricity that Bitcoin mining consumes is a particularly peculiar one. The University of Hawaii at Manoa compares emissions from cryptocurrency usage to that of the UK’s car fleet, completely ignoring that the former could be reduced way easier than the latter.
UMH Department of Geography Study
The UMH department of geography study reveals that within 22 years, bitcoin could produce enough greenhouse gases to boost global temperatures by 2C (3.6F), which is thought to be the critical threshold above which climate change would become completely devastating. This study assumes that the rate of cryptocurrency adoption would equal that of other technologies and that current emission patterns per KwH in the countries that host Bitcoin mining hardware, will remain at their current levels. It also assumes that more adoption requires more mining – a deep misunderstanding about how Bitcoin works.
The Study
These assumptions are influenced by the recent surge in Bitcoin mining power. Under these assumptions, experts at the University of Hawaii at Manoa analyzed emission information across several stages of the Bitcoin mining chain. Researchers observed that during the year 2017, electronic cash emitted 69 million metric tons of CO2. In 2016, the UK car fleet emitted 69.7 MtCO2e (Metric tons of carbon dioxide equivalent), as established by the UK’s Society of Motor Manufacturers and Traders. This makes the emissions of cryptocurrency and the emissions of the UK’s car fleet virtually equal.
Study Lead author Dr Camilo Mora said: “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. ‘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.”
The Take-Away
The report suggests that cryptocurrenices must aim at reducing the electricity demand. Mining, which is crucial for the transaction verification process require a lot of energy. That is an element that PoW-based blockchains require, but not PoS or IOTA’s Tangle either. Therefore, the view these researchers have is pretty skewed and shows a misunderstanding of how the cryptocurrency space works.
The Point That This Study Does Not Make
Beyond that, the study ignores the fact that even if the volume of transactions increases and there is more widespread adoption of Bitcoin and other PoW coins, more mining power is not required to sustain the system. Adoption and an increase in mining power are not necessarily co-related. Not even price and the increase of mining power invested in Bitcoin, are correlated.
Efficiency is not Bitcoin-Dependent
But perhaps the most blatant logical lapse that this study shows, is the fact that emissions can be curtailed before electricity is used by cryptocurrency miners. Electricity generation can be more efficient, which will reduce emissions across the board and that is precisely where world leaders in the subject are headed.
This study is a backwards-looking piece of research that shows misunderstanding insofar as how cryptocurrencies work. It also ignores the technological component of both electricity generation and cryptocurrency evolution. If researchers and mainstream media commentators would like to fixate on the electricity consumption in the cryptocurrency industry, should be aware of these nuances.
