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Save the planet, ditch cryptocurrency

31 October 2018

We all know about the rise and fall of Bitcoin.

Just months ago, Bitcoin was the darling child of the "we have more money than sense" investment community. People were selling their houses or borrowing heavily against them to buy Bitcoin and for a very brief period, these folk enjoyed astronomical gains.

Then reality bit.

Now, many of those "savvy" investors realise that they simply got caught up in the hysteria of the moment, a hysteria driven (yet again) largely by the mainstream media.

The very lucky ones might have made some money but the vast majority are now licking their wounds and sitting on a heap of cryptocurrency that is unlikely to ever return to the value at which they bought it.

And now there's another knife in the back of cryptocurrency -- it's going to kill the planet.

As most tech-savvy people are aware, it takes a lot of energy to mine cryptocurrency.

Back at the peak of the craze, people were investing huge sums to build mining rigs which consisted of piles of computers, each loaded with as many high-powered GPUs as they could handle. All of this processing power requires electricity, and quite a bit of electricity at that.

All of this processing power also generates quite a bit of heat and the really serious players had air-conditioned rooms for their array of mining rigs. That aircon also consumes large amounts of electricity.

According to the peer-reviewed journal Nature Climate Change, cryptocurrency mining is now consuming so much power that the emissions created by generating that power could, on their own, raise global temperatures by 2 degrees C within 16 years.

Researchers have worked out that Bitcoin mining alone was responsible for some 69 million tonnes of CO2 emissions in 2017.

Fortunately, the cryptocurrency craze seems to be waning somewhat but mining operations still account for a significant amount of energy use and therefore CO2 emissions. What's more, the study doesn't seem to take into account the increase in efficiency that computer/GPU systems are likely to experience over the coming decade or two, nor the ever increasing contributions from renewable energy sources, but never the less, the numbers are sobering.

Perhaps the only way to address this looming problem would be to place a carbon tax on crypto-currency but, as we know, that would be impossible, due to the decentralised nature of such processing and the lack of any authority's ability to levy such a tax.

Perhaps this revelation will simply be another nail in the coffin of cryptocurrency, an idea that is great in theory but perhaps not so good in practice.

I'd love to hear readers' predictions for the future of cryptocurrency.

Will it remain a "black market" currency, used mainly for trade in illicit products and services and outside of the mainstream financial markets?

Or will we all be using some form of cryptocurrency within a few short decades?

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