By Rayane Chbouki.
Criticized in particular for its instability and its suspicious links with the Darknet, cryptocurrency arouses a new wave of indignation from the defenders of the environmental cause. Yet, some experts regard this currency as the future of the international monetary system. Not only would this undo the established economical systems of our world, it is a danger to our world’s natural environment.
Economy vs Ecology
Generated through the use of powerful computers and servers, cryptocurrency is particularly energy-intensive. The impact of Bitcoin, Ethereum and other virtual currencies would be worse than the energy impact of search engine data centers.
The system of these currencies is based on peer-to-peer functioning: the people who carry out transactions in these currencies are both client and server. Each transaction must be verified and validated by the nodes, before being recorded in a public space (a block) that can be consulted by all users. Mining defines the action performed by certain users which consists in ensuring the proper functioning of the blockchain and the creation of new blocks, thus new Bitcoins. The discovery of new bitcoins is increasingly difficult and requires increasingly powerful computing resources. Every Bitcoin transaction requires the same amount of energy consumed in one day by 9 US households (about 250 kWh) and the annual consumption attributable to this cryptocurrency (33 TWh) is equivalent to that of a country like Bulgaria.
Cryptocurrencies have drained energy sources
The main problem of such overconsumption is the type of energy used. China is home to the main mining areas of Bitcoins, a country where the main source of energy comes from coal (two-thirds of the Chinese energy mix comes from this fossil resource, compared to 26% for the national average). The consumption of fossil energy therefore induces significant greenhouse gas emissions: each Bitcoin transaction would have a carbon footprint of 122 kg of CO2!
These figures are all as worrying as the mining of Bitcoin is now done on an industrial scale. In August 2017, journalists managed to penetrate the premises of a Bitcoin mining plant located in the Inner Mongolia region of China. Operated by the Chinese company, ‘Bitmain Technologies’, it consists of 8 buildings and more than 25,000 mining machines (high-performance computers). The company, in order to avoid excessive electricity bills, managed to obtain from the government a 30% discount on the price of energy (from a nearby coal-fired power station). By finding out the price of the monthly electricity bill, journalists have managed to claim that more than 40 MWh per hour are consumed for the production of Bitcoins in this single plant. American experts estimate that the electricity consumption of Bitcoin will only increase in the coming years, and will reach the equivalent of the current annual consumption of the world during 2020.
To put things in a nutshell, cryptocurrencies have put energy sources in a soaring state which is still growing exponentially. So how can we fight against such an impersonal and global system? As world leaders commit to the future of the planet and try to encourage private actors to do the same, it seems difficult to combat the harmful effects of cryptocurrencies, but not impossible. As a matter of fact, if we drastically reduce our use of cryptocurrency and invest in some new environmentally-friendly infrastructures to host all the data, we could make a tremendous impact. If more and more people inform others on all the dangers provoked, raising people’s awareness, first at an individual scale, then this scale will significantly expand to the whole world.