The astronomical level of energy usage required to mine Bitcoin and other cryptocurrencies, has been a contentious point of discussion for several years. Now a new report shows that if Bitcoin is implemented at similar rates asother emerging technologies, it alone could generate enough carbon dioxide to push the planet beyond 2°C of warming by as soon as 2033. Given the global consensus that a temperature rise of above 1.5°C would lead to catastrophic effects on the environment this new statistic is deeply disturbing and worth all of us involved in, or rooting for, the crypto industry to consider our options.
Many crypto and blockchain-based companies are looking to the technology to help solve social and environmental issues of our time, such as sustainable supply chains and decarbonizing and democratizing energy systems. That said, the exponential energy consumption and carbon emissions produced from the proof-of-work algorithm required for mining Bitcoin and other cryptocurrencies is directly at odds with this vision for the technology. So what, as an industry, can we do about it?
Improving Efficiencies Of The Bitcoin Protocol
The proof-of-work algorithm is an elegant solution. The very fact that it’s costly in terms of the computing power ‘work’ required to operate is what makes it unbreakable. One obvious solution to the issue of energy consumption then is to keep improving this existing protocol through further efficiencies. And everyday innovators are flocking to this new technology doing just that. The recent Lightning Network update, for example, allows a combination of off-chain and on-chain transactions which improves overall efficiency of the Bitcoin platform. Advances in computer chips are also continually improving the efficiency of computation relative to power. However Bitcoin’s core algorithm means that as long as there is money to be made, miners will continue to consume more power, and if the technology continues to expand and grow as we expect, these small concessions will certainly not be enough to save the industry from exorbitant energy usage.