My wish for 2018 is for the entire cryptocurrency boom to collapse in a titanic heap, leaving only charred ruins and a lot of LOLs in its wake. There are many reasons for this and anyone who loses their money investing in what is obviously a scam doesn’t get much sympathy from me. But among the reasons is its horrific energy impact.
Bitcoin’s energy footprint has more than doubled since Grist first wrote about it six months ago.
It’s expected to double again by the end of the year, according to a new peer-reviewed study out Wednesday. And if that happens, bitcoin would be gobbling up 0.5 percent of the world’s electricity, about as much as the Netherlands.
That’s a troubling trajectory, especially for a world that should be working overtime to root out energy waste and fight climate change. By late next year, bitcoin could be consuming more electricity than all the world’s solar panels currently produce — about 1.8 percent of global electricity, according to a simple extrapolation of the study’s predictions. That would effectively erase decades of progress on renewable energy.
Although the author of the study, Alex de Vries, an economist and data consultant based in the Netherlands, has shared these calculations publicly before, this is the first time that an analysis of bitcoin’s energy appetite has appeared in a peer-reviewed journal.
Bitcoin continues to soar in popularity — mostly as a speculative investment. And like any supercharged speculative investment, it swings wildly. Within the past 18 months, the price of bitcoin has soared ten-fold, crashed by 75 percent, only to double again, all while hedge funds and wealthy libertarians debate the future of the virtual currency.
Beyond its tentative success as a get-rich-quick scheme, bitcoin has an increasingly real-world cost. The process of “mining” for coins requires a globally distributed computer network racing to solve math problems — and also helps keep any individual transaction confidential and tamper-proof. That, in turn, requires an ever-escalating arms race of computing power — and electricity use — which, at the moment, has no end in sight. A single bitcoin transaction is so energy intensive that it could power the average U.S. household for a month.
Bitcoin may in fact be the single most appropriate way for the world to collapse–the combination of grotesque energy use in an era of climate change, speculative New Gilded Age capitalism, and libertarian asshole fantasies sums up so much of our world.