It’s Halloween week, so it’s time for another scary story about how the popular cryptocurrency Bitcoin will destroy the world through its energy usage.
“Bitcoin mining on track to consume all of the world’s energy by 2020,” a frightening Newsweek headline claimed a year ago.
Now it’s the journal Nature Climate Change, with a brand-new horror story of its own, titled “Bitcoin emissions alone could push global warming above 2°C.” Supposedly this could occur as early as 2033.
But ThinkProgress interviewed three leading experts on the subject of information technology (IT) energy use, who were all highly critical of the study’s assumptions, analysis, and ultimate conclusions.
As Dr. Jon Koomey, who was a Lawrence Berkeley National Laboratory (LBNL) scientist for more than two decades, explained to ThinkProgress, calculations of Bitcoin energy use are complicated.
So “one thing we should NOT do is recklessly extrapolate recent growth rates for Bitcoin into the future, as the Nature Climate Change article published today [Monday] appears to do,” wrote Koomey in an analysis published Monday.
“I cannot emphasize enough how dangerous, irresponsible, and misleading such extrapolations can be,” he writes, “and no credible analyst should ever extrapolate in this manner, nor should readers of reports on this topic fall for this well-known mistake.”
Keeping total global warming below 2°C (3.6°F) requires a laser-like focus on the big sources of carbon pollution, like transportation, buildings, and industry. So it’s dangerous and irresponsible to create the impression that it’s even harder than we thought, and that we will have to devote vast resources to a new area of focus — especially when that impression is built around very misleading analysis.
Creating a new Bitcoin and verifying a transaction using so-called blockchain “proof of work” technology consumes electricity, but exactly how much is widely debated. In part that’s because anyone and indeed everyone who can solve very complicated computational problems can validate transactions, and in turn earn Bitcoins.
Here’s one of the most popular online video explanations of this complex scheme:
Because the central process behind Bitcoin transactions is computationally intensive, it is electricity intensive. That drives Bitcoin miners toward ever greater computing power and electricity consumption, especially as Bitcoins soared in value in 2017.
But calculating how much total electricity is being used around the world for every Bitcoin transaction is a very complicated task, which is why many experts are criticizing recent assertions regarding the scale of energy intensity tied to Bitcoin, like those in the new study.
Mechanical engineering professor Eric Masanet told ThinkProgress “we can debunk their analysis pretty handily by pointing to three egregious flaws.”
Masanet, who leads the Energy and Resource Systems Analysis Lab at Northwestern University, explained “We know that the global power sector is decarbonizing and that IT (including cryptocurrency data mining) are becoming much more energy efficient. It appears that the authors have overlooked these two latter trends in their projections.”
The third egregious flaw as Masanet said is “simultaneously insisting on tremendous growth in cryptocurrency adoption, resulting in inflated and dubious estimates of future carbon emissions.”
Lawrence Berkeley National Lab research scientist Arman Shehabi agreed. “The authors appear to have focused their analysis on a very unlikely scenario: one where the electricity demand of [individual] Bitcoin transactions and the carbon emissions from that electricity demand both remain static over the next hundred years, while at the same time Bitcoin immediately undergoes rapid adoption. Unfortunately, the article’s attention on the results from this unlikely scenario obscures just how unlikely they are.”
Shehabi said it’s absurd to assume the energy consumption of those systems would remain about the same for the next one hundred years. “That’s a crazy assumption in general, but downright bananas for blockchain mining,” Shehabi said, “which has already increased efficiency by an order of magnitude or more in the last few years.”
Indeed, Some of the top universities and companies are working to make blockchain more efficient, as CNBC reported in February. Some are pursuing a different validation process that would be vastly less computationally and energy intensive.
Koomey, author of the book “Turning Numbers into Knowledge,” explained that the most credible calculation for the current energy consumption by Bitcoin is just 0.1 percent of total global electricity — which is a long way from threatening the climate.
According to these experts, the Bitcoin energy crisis has been overhyped and, to the extent that there is wasteful energy use, top engineers and professors are working to solve the problem.