Cryptocurrencies and Climate Change

Bitcoin (and many more) cryptocurrency prices have been sky rocketing for the lasts weeks/months, and thus their usage and mining. But have we stop thinking how this impacts the Climate Change?

Before jumping into graphs, a quick recap on how cryptocurrencies work: when you buy or sell Bitcoins (for example), your transaction is being recorded into a distributed ledger. This distributed ledger is cryptographically secured against tampering, meaning that once anything is written into it, there is no way of changing nor removing it. But that ledger needs to reside and be supported by a platform. This platform is what the miners provide, and the computation power they contribute with is what enables the distributed ledger.

I’ve covered more in detail here and here how blockchain works and how you could have a basic implementation with a few lines of code.

The issue here is that in order to seal the ledger’s records, a really hard computation is performed in parallel across all the miners in the world, as a race to be the first to figure out the challenge and earn some coins (the transaction fees) in exchange.

This process is extremely inefficient and power demanding, and this is why it should concern us. A lot.

Based on different articles, power consumption for bitcoin (alone) is higher than some countries (and not exactly third world countries):

Bitcoin power consumption

This is worrisome, to say the least: we’re generating an incredible amount of CO2 that is not yielding anything useful in return. I’m not saying cryptocurrencies are not useful, but that cryptocurrencies (based on proof-of-work) are not worth it if to make them work we increase our chances of having a climate disaster in the close future.

Please, I know it’s tempting to buy Bitcoins, I’ve did it in the past and vouched for these kind of coins to be a way of monetizing the web, but this is out of control and, IMHO, not worth it at all.