While Bitcoin has been touted as an ideal option in what cryptocurrency advocates deem a corrupt system of fiat currency, it isn’t without its major flaws. Often overlooked is the contradiction between the idealistic enthusiasm of its proponents in contrast with the hefty environmental cost of maintaining the currency. While the cryptocurrency is digital by nature, it relies on an extreme amount of energy to be mined and maintained.
The process of mining Bitcoin requires thousands of high-powered custom computers wired together in big warehouses globally that function 24/7, with one Bitcoin being mined every 10 minutes. With the surge of the coin’s popularity, mining has only grown, as hopeful miners solve nonstop in order to record transactions on Bitcoin’s global ledger. This design, although ingenious, demands a computational (and therefore monetary) cost. The enormous expenditure of computational energy does not often yield in the reward of successfully mining Bitcoin.
Alarmingly, as the price of Bitcoin grows, so does the amount of electricity consumption required to keep up with increased mining. Even though mines are often established where energy is cheap (or goes to waste), the sobering fact is that the energy required to mine Bitcoin is more than enough to fuel Argentina’s electricity requirement. In a climate crisis, this cannot go overlooked. And yet, even self-proclaimed environmentalist Elon Musk has turned a blind eye to this fact with Tesla’s recent $1.5 billion investment in the cryptocurrency.
On the bright side, thanks to the price surge and popularity of the coin, many variations, ‘alt-coins’ and digital currencies are being inspired to compete with Bitcoin as the word takes to its argument for digital currency. Most of these currencies will not take a computational toll requiring the kind of energy consumption would rival Bitcoin’s. Perhaps this is a silver lining that could compel even Bitcoin advocates to start looking into more sustainable digital currencies.
For all of Bitcoin’s positives, it’s irrefutable that the environmental costs are alarming and heavily dubious. It is time users to consider the impacts of the cryptocurrency and look into alternatives that will provide similar benefits as well as a more sustainable future.