Will Bitcoin Destroy the World?
I have to admit that I don’t understand bitcoin. Go ahead: read the Wikipedia entry for how bitcoins are “mined” and see if you can understand it. The price of it is soaring again on the market today, to over
$15,000 now $18,000 now $19,000 (this movement happening as I write this item!) in what looks like a classic bubble. I think I’ll stick with my hypothesis that bitcoin, and its correlative phenomenon, blockchain, are really an advanced Bond villain plot to crash the world’s markets somehow, sort of a clever remake of Goldfinger.
I gather that bitcoin is “mined” in the digital equivalent of gold or silver mining, and that the quantity of bitcoin is therefore finite in some way. But there’s another problem: it may destroy the planet! Naturally environmentalists will worry about this, as this article from Grist explains:
. . . Bitcoin is slowing the effort to achieve a rapid transition away from fossil fuels. What’s more, this is just the beginning. Given its rapidly growing climate footprint, bitcoin is a malignant development, and it’s getting worse. . .
Digital financial transactions come with a real-world price: The tremendous growth of cryptocurrencies has created an exponential demand for computing power. As bitcoin grows, the math problems computers must solve to make more bitcoin (a process called “mining”) get more and more difficult — a wrinkle designed to control the currency’s supply.
Today, each bitcoin transaction requires the same amount of energy used to power nine homes in the U.S. for one day. And miners are constantly installing more and faster computers. Already, the aggregate computing power of the bitcoin network is nearly 100,000 times larger than the world’s 500 fastest supercomputers combined. . .
In just a few months from now, at bitcoin’s current growth rate, the electricity demanded by the cryptocurrency network will start to outstrip what’s available, requiring new energy-generating plants. And with the climate conscious racing to replace fossil fuel-base plants with renewable energy sources, new stress on the grid means more facilities using dirty technologies. By July 2019, the bitcoin network will require more electricity than the entire United States currently uses. By February 2020, it will use as much electricity as the entire world does today.
Of course this is just the kind of ludicrous projection that environmentalists would swallow, though if it is remotely true it heralds a dotcom-style bust for bitcoin in the not too distant future.
But if climatistas are seriously worried about the “clean” energy implications of the digital world, they’d have long ago turned their sights on Google, etc. It was calculated several years ago that every Google search released the equivalent amount of carbon dioxide as boiling a kettle of water—about 7 grams of CO2. This will have changed some with the decline of coal and rise of natural gas, but not by that much.
What happens if you “Google” bitcoin? I suspect Al Gore gets indigestion. Speaking of Bond villains.
JOHN adds: I don’t understand bitcoin either. But the most surprising aspect of this post, for me, was the revelation that Grist still exists. Who knew?
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