Greenpeace: Bitcoin energy problem speaks to wider challenge for internet’s future
42 | 5/25/2021 3:57:46 AM
With the hindsight of today's perspective on Bitcoin's (BTC) exorbitant energy consumption, it might come as something of a surprise to learn that the international non-governmental environmental organization Greenpeace was one of its earlier adopters.
Back in 2014, the organization set up a facility for accepting Bitcoin donations, yet this enthusiasm has now cooled, as widespread attention has homed in on the climate risks posed by energy-guzzling Proof-of-Work coins like Bitcoin. Last week, news broke that Greenpeace had decided to scrap the facility, holding it to "no longer be tenable" in an era of rapid global warming.
Much of this concern has been amplified by the fact that this year's unprecedented cryptocurrency bull market was accompanied by a corresponding hike in energy needs: skyrocketing prices led to a doubling of the Bitcoin network's energy consumption by March of this year, according to a recent study from the Vrije Universiteit Amsterdam.
In correspondence with Cointelegraph, Greenpeace USA media director Travis Nichols said that as the environmental profile of Bitcoin became clearer to the organization, Greenpeace did indeed decide to scrap its facility, despite the fact that the number of BTC donations it had received was not significant. Nichols contextualized Bitcoin's energy quandary within a wider perspective on global digital infrastructure, writing:
Nichols noted that only a fifth of the electricity used in the world’s data centers currently comes from renewable sources — something that will have to be turned around fast if the internet's expansion and role in supporting economic growth are to be made sustainable.
To push back against Bitcoin's growing reputation as a “dirty currency,” several industry participants have tried to draw attention to the fact that its energy needs are still overshadowed by those of the global banking system and even the gold market. A recent report from Galaxy Digital contrasted these aggregate figures to show that Bitcoin still consumes less than either, in addition to stressing that data from the banking industry on electricity consumption is significantly less transparent than that available for Bitcoin.
However, analysts from outside the industry counter this by emphasizing the relative, not aggregate, figures. A blog post from the London School of Economics published today notes that “each individual bitcoin transaction uses the same amount of electricity as 778,988 credit card transactions” and has “the same carbon footprint as processing 1,218,903 transactions.”
Nichols' bottom line was that the internet, like all infrastructure, will need to be powered by “clean energy sources that help, not hinder the crucial challenge of tackling climate change.” Those advocating for Bitcoin's potential to purportedly incentivize renewables adoption will have to prove their case, and fast, or risk the veteran cryptocurrency being “left behind” as the world enters the endgame of climate politics.