itcoin is burning a hole in our future. The cryptocurrency now produces as much CO2 a year as a million transatlantic flights. What’s more, that number is set to grow by design. Bitcoin is essentially a computational race among a peer-to-peer network to crack increasingly complex algorithms without any intrinsic meaning or utility, calculations that demand ever more processing power to complete, devouring energy overwhelmingly sourced from fossil fuels.
In an era of accelerating climate crisis, driven primarily by carbon emissions, it is a technological innovation of violence towards current and future generations. The scaling of Bitcoin and the proliferation of similar technologies and practices would all but lock in deep and violent climatic instability, from extreme weather events and collapsing food and water security to rising sea levels and biodiversity loss in the decades ahead. Driven by techno-libertarians deeply opposed to collective institutions and public governance, the idea of Bitcoin is rooted in a politics that will guarantee growing environmental crisis given the need for economic and political co-ordination to bring us rapidly within the safe operating spaces of the planet.
If we wanted a metaphor for the worst excesses and circuits of accumulation driving us deeper into the Anthropocene, our new geological era of human-driven planetary breakdown, Bitcoin would be a good candidate. But what, practically, is Bitcoin? In brief, Bitcoin is a cryptocurrency, a purely digital medium of exchange based on computational code breaking. The architecture of the currency is designed to do away with the need for a centralised “treasury”, central bank or other actors that reconcile and oversee transactions; it is a peer-to-peer currency, based not on social confidence or collective monetary or governance institutions but mathematics and private computing power.
Critically, “mining” – the decentralised process by which a transaction is computed, validated and added to the permanent record of the network – is a voracious consumer of energy. The scale of consumption is astonishing. The bitcoin network is estimated to consume at least 2.6GW of power globally. To put this into context, according to the International Energy Agency, if Bitcoin were a country it would already be the 39th biggest energy consumer. The journal Nature, meanwhile, has calculated that the annual carbon footprint of Bitcoin and Ethereum (the other major cryptocurrency) is comparable to a country of roughly seven million European inhabitants. Moreover, energy economists have predicted the network’s consumption could rise to 7.7GW before the end of the year. This would be equivalent to almost 0.5 per cent of the world’s electricity consumption.
These numbers are only likely to grow at present. The network is designed to continue to ratchet up energy use. Each transaction requires a huge and growing amount of calculation to process a financial transaction, which in turn requires energy. As Alex Hern, the Guardian’s technology reporter, succinctly puts it, “in simplified terms, bitcoin mining is a competition to waste the most electricity possible by doing pointless arithmetic quintillions of times a second.”
If the energy used was renewable and the network’s computing infrastructure built through non-extractive means, rapidly scaling energy use might be less of a problem. However, roughly two-thirds of all cryptocurrency mining is conducted in China and is overwhelmingly powered by coal plants, driven by a peculiar marriage of libertarian technologies, the directive power of Chinese state capitalism, and the energy geography of the Middle Kingdom.
At the same time, the network is designed to adjust to the difficulty of mining so that no matter how much computing power there is on the network, only one block is produced every ten minutes. As such, we can’t rely on the rising power efficiency of mining computers to lessen the network’s environmental impacts. Given the zero-sum nature of Bitcoin, efficiency improvements will only encourage “miners” to run more machines for the same power use, increasing their chance of cracking the algorithm, rather than seeing a tailing off of energy consumption.
As we confront a world of mounting environmental collapse – collapse rooted and driven by extractive and carbon-heavy models of development that Bitcoin exemplifies in many ways – there are three wider lessons we can learn from considering the network and its effects.