Rebuttal to Cryptocurrency Causing a Dominant Percentage of Global Warming
Cryptocurrency is quickly becoming the next craze by the general populous. This seemingly wild, decentralized approach has the potential to completely replace traditional currency within the lifetimes of the next generation, or at least lead to a substantial shift in terms of transactions, as everything is becoming more and more digitized. My discussion here is to reveal that, whether one supports this on its own merit or not, using global warming, climate change or whatever as an argument against it is just another agenda-driven attempt to thwart something that could turn out to be valuable
This technology relies on mathematical irreversibility. All cryptocurrency variants utilize blockchain technology to verify the integrity of the solved hashes of each specific coin.
The blockchain is a digitized ledger, meaning it records transactions in a mathematically secure way and structures itself where it cannot be manipulated. This eliminates the possibility of fraud and establishes trust between end users. To add to the innovation, no personal identity is tied to the transactions that take place between users. All of them take place on the blockchain, where no personal information is required to send or receive money. At the time of this writing, there are 1,519 coins and 8,708 markets where the various coins can be transacted. Bitcoin has ~39% of the total market share, with Ethereum coming in second and Ripple coming in third in terms of market cap.
This financial “Age of Enlightenment” has met a fair bit of skepticism and hyperbole around the purely mathematical concept. Between the lack of regulation, coins popping up attempting to add value to worthless elements of our society, and even the concept of cryptocurrency being called sexist, another outlandish allegation is that this cryptocurrency is contributing to global warming. So, is it as harmful as people are purporting it to be?
As coins are mined, they have to solve mathematical hashes, which takes power. CPUs, GPUs and a special-customized type of computational hardware, ASICs (application-specific integrated circuits), among other hash-solving tools, are used to get at the solution. Obviously, this takes an enormous amount of computing power to accomplish.
The success of cryptocurrency is widely attributed to mining initiatives in China, partially due to the cheap cost of energy. It is true that most electricity (~80%) in China is produced via the burning of coal, and only ~12.5% of the energy in the United States is renewable.
However, the influence of Bitcoin on the total energy consumption of the world is only 0.23%, or approximately the energy consumption of Uzbekistan. This results in 4,730,680 households being able to be powered by Bitcoin.
A Quantitative Analysis
Now for some calculations (and generous assumptions):
We obtain this figure from http://shrinkthatfootprint.com/american-carbon-footprint.
According to the 2010 Census, the average number of people per household is 2.86. Multiplying the number of households that Bitcoin can support (4,730,680) by 2.86 gives a total of 13,718,972 people that it can provide electricity to.
Assuming that everyone who owns Bitcoin or has mining operations is located in the USA — a completely invalid assumption — according to H. Damon Matthews et al, 2014 Environ. Res. Lett. 9 014010, the United States contributes 0.54°C of warming per billion people per century.
Doing a quick calculation, dividing the total number of people Bitcoin can provide electricity to (13,718,972) by 1,000,000,000 and multiplying that by the warming contribution gives the result that Bitcoin warms the planet by 0.0074°C per 100 years. However, Bitcoin only makes up ~39% of the total market cap of cryptocurrency. Making the crazy and invalid assumption that the energy required to mine all of the other coins is the same, this would result in a grand total of ~0.018 degrees Celsius per 100 years.
Statistically, this contribution to warming the planet can be wiped out in a day-to-day variation of ENSO, or the general orientation of the teleconnections in the atmosphere, where the signal will disappear in the noise and become insignificant.
Food for Thought
Think about the world’s financial system today. We’re wasting electricity and emitting CO2 to operate banks in every way possible. Bankers all around the world have to drive cars to the bank, emitting CO2. When they get there, more CO2 is emitted for thousands of hours a year to power the banks’ buildings and massive computational architecture. If you need to go to a branch or ATM to withdraw money, you’ll burn CO2 as well going to and fro. This process repeats every single day. Furthermore, paper bills are composed of between 3-8% paper and 25% linen. If one is really concerned about CO2 emissions, with an adaptation of blockchain technology, the CO2 needed to produce the vast amounts of linen and the trees destroyed to make the percentage of paper in each bill will cease to be emitted. Additionally, the CO2 emitted in the production and shipment will be saved.
As cryptocurrency and blockchain technology evolves, and if it gets adopted by financial institutions, that all goes away. Integrating the amount of CO2 emitted over time saves gigatons upon gigatons, therefore helping the environment.
To conclude, we have issues that are far greater than blaming cryptocurrencies for global warming. In every IPCC paper, I haven’t heard anyone clamoring about how energy hungry Uzbekistan is.
To quote Winston Churchill, “The truth is incontrovertible. Malice may attack it, ignorance may deride it, but in the end, there it is.”
Joe Bastardi, a pioneer in extreme weather and long-range forecasting, is a contributor to The Patriot Post on environmental issues. He is the author of “The Climate Chronicle: Inconvenient Revelations You Won’t Hear From Al Gore — and Others.”