Guest essay by Eric Worrall
Will latte sipping Silicon Valley Trendies give up their high carbon Cryptocurrencies to save the planet from global warming?
THE HARD MATH BEHIND BITCOIN’S GLOBAL WARMING PROBLEM
SCIENCE 12.15.17 07:00 AM
LET ME FREAK you out for a second. You know what bitcoinis, right? I mean, no, but quickly, it’s a “cryptocurrency” that’s basically secret computer money. One bitcoin, which doesn’t actually have a real, physical form, is worth at this moment upwards of $16,000. But to get one, you either have to buy them from online exchanges or use specialized computing hardware to “mine” it. That last bit is where the freak-out comes in.
In a report last week, the cryptocurrency website Digiconomics said that worldwide bitcoin mining was using more electricity than Serbia. The country. Writing for Grist, Eric Holthaus calculated that by July 2019, the Bitcoin peer-to-peer network—remember BitTorrent? Like that—would require more electricity than all of the United States. And by November of 2020, it’d use more electricity than the entire world does today.
That’s bad. It means Bitcoin emits the equivalent of 17.7 million tons of carbon dioxide every year, a big middle finger to Earth’s climate and anyone who enjoys things like coastlines, forests, and not dying of mosquito-borne diseases. Refracted through a different metaphor, the Bitcoin P2P network is essentially a distributed superintelligence utterly dedicated to generating bitcoins, so of course it wants to convert all the energy (and therefore matter) in the universe into bitcoin. That is literally its job. And if it has to recruit greedy nerds by paying them phantom value, well, OK. Unleash the hypnocurrency!
The thing that makes Bitcoin bitcoiny is the blockchain, the secure ledger of all payments and trades. The point of the P2P bitcoin network is the generation and maintenance of that ledger, and technically anyone can contribute updates—those recordings of transactions are blocks in the chain. But there’s a catch. (This was the bit of genius in bitcoin inventor Satoshi Nakamoto’s pitch, whoever the almost certainly psuedonymous “Satoshi Nakamoto” is or are.) In order to contribute a block, you also have to solve some really hard math, a “hashing algorithm” called SHA-256.
You can’t trick your way into solving that math. The SHA-256 algorithm is designed, intentionally, to be so hard that it requires brute-force computing. Try as many computational answers as you can, as fast as you can. Which means you have to keep your computer turned on all the time, running the fan to cool off your hot, overclocked processor. “The energy consumption is a security feature. It’s a good thing,” Sirer says. “To take over the system, you’d have to spend at least as much as what the system is spending now. You have to own 51 percent of all the hashing power.”
The expenditure of all this electricity, the proof of work, is the keystone of Bitcoin payment security. People whose computers crack the code breaking problem at the heart of Bitcoin, and in doing so help enforce Bitcoin’s payment transaction integrity, get to reward themselves with a few newly minted bitcoin.
This CO2 belching code breaking effort can’t be made too much easier. While the difficulty can be adjusted by mutual consent, making the code breaking problem too easy would allow people to steal other people’s bitcoins. The whole system would break down into a shambles of fraud and misplaced coins.
To put it another way, given that most of the cost of mining bitcoin is the cost of the electricity you have to burn to solve the proof of work problem, the thousands of dollars you have to pay to buy a single bitcoin is the electricity bill you would have to pay if you mined that bitcoin yourself.
The delicious irony is, the people who created and promoted and popularised this pointless carbon belching monstrosity are mostly also the people driving California’s green agenda.
What can be done to fix this disaster?
Some alternative cryptocurrencies like Ethereum have attempted to replace Bitcoin style proof of work with a low energy alternative, proof of stake. Instead of rewarding people with the most powerful computer, proof of stake seeks to reward investors who got in on the ground floor, giving the lions share of new coins to founders.
Switching Bitcoin to proof of stake, assuming it works as well as proponents claim, would likely be enormously unpopular with those bitcoin entrepreneurs who invested millions building expensive high tech proof of work bitcoin mining rigs.
All this ongoing Bitcoin climate harm could be averted if Californian greens reject Bitcoins and go back to using good old US dollars. Less fashionable, but also way less carbon intensive.
Perhaps concerned greens could start putting signs in their shops “Bitcoins not welcome”.
I’m sure given a choice between giving up Bitcoins and saving the penguins and polar bears, or gross climate hypocrisy, green Californian trendies will make the same choice they always make.