Bitcoin Uses As Much Energy As Austria, Could Add 2°C to Earth’s Atmosphere 0 186

Bitcoin mining, it turns out, damages the earth more than more traditional environmental assaults like actual mineral mining.

According to a paper published Monday in Nature Sustainability, the power-hungry Bitcoin mining process consumes more than triple the amount of energy needed to mine the equivalent amount of gold, more than quadruple what’s needed for copper, and more than double what it takes to mine platinum.

Other coins didn’t fare much better. By their measurements, Ethereum and Litecoin consume 7 megajoules of electricity to produce the equivalent of $1, the same energy expenditure as copper mining but more than that of platinum or gold. Monero eats up 14 megajoules to produce $1.

Naturally, these measurements refer to the notoriously variable dollar valuations of such tokens. “While the market prices of the coins are quite volatile,” write researchers Max J. Krause and Thabet Tolaymat, “the network hashrates for three of the four cryptocurrencies have trended consistently upward, suggesting that energy requirements will continue to increase.”

Bitcoin’s Growing Electricity Bill is Bigger Than Some Countries

We’ve long known that Bitcoin is unsustainable. In a 2015 article for Motherboard, Christopher Malmo pointed out that a single Bitcoin transaction used 5,033 times as much energy as a Visa swipe, and could power 1.5 American homes for a day.

The electricity used to crunch Bitcoin code—and its environmental cost—has been growing with its increasing popularity. Digiconomist’s Bitcoin Energy Consumption Index shows Bitcoin currently consuming 73.12 terawatt hours (or 263.232 billion megajoules) of electricity annually. To put that in context, it’s comparable to the amount of energy it takes to power Austria for a year.

That means there are 175ish countries on earth using less energy than Bitcoin (to say nothing of crypto on the whole), while 66 countries consume less energy per capita than one Bitcoin transaction (it takes 94 thousand kilowatt hours of electricity to mine a single Bitcoin).

Iceland, a major hub of Bitcoin mining farms, spends nearly as much energy on Bitcoin as it does powering its residential homes. In this case, the damage is mitigated because most of Iceland’s power comes from renewable energy.

Canada’s Bitcoin emissions are also on the lower end due to renewable energy sources. They’re using this to court mining companies from China, where mining emissions are about four times that of Canada’s. Montreal International attracts foreign investment by calling Quebec the land of “green bitcoin”. This has caught the eye of some Chinese mining companies looking to go overseas as the Chinese government has discouraged expansion and shut down some mining operations altogether.

Depending on Bitcoin’s growth, some have projected that it could use as much energy as the entire world by 2020.

Digital Currency Has a Real Carbon Footprint

Krause’s and Tolaymat’s research reminds us of the sobering reality that all this invisible wealth has real world costs.

For the 30 months they measured between January 2016 and June 2018, they estimate their four featured tokens collectively belched out at least 3 million tons of CO2 emissions, possibly as much as 15 million tons.

These findings follow another study, published last month, which determined Bitcoin alone could add two degrees Celcius to global warming within the next three decades. That’s enough to raise ocean acidity by 29 percent.

Solving Bitcoin’s Energy Consumption Crisis

So what is the solution? If the world were to switch to 100 percent renewable energy overnight, the problem would be moot. But we can’t hold our breath for that. There could be ways of incentivizing clean energy so greener mines reap more coins, or of implementing clean energy in other ways.

It’s also possible to adopt less computationally intensive mining algorithms so the mining computers don’t guzzle as much juice. This would disappoint a lot of old school Bitcoiners who have invested in hardware, but their feelings don’t really outweigh that 2 degrees celcius that everyone will have to live with (or die by).

Whatever the best solution turns out to be, something needs to change soon. Bitcoin is growing up, and it’s time for it to mature into something more sustainable.

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A tribal member of the Choctaw Nation, Brian grew up in the Silicon valley under the technological mentorship of Steve Wozniak. He's lived, worked and traveled all over the world, and now writes and makes films in the Pacific Northwest.

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Making the Swytch to Sustainability 0 12733

You might think a US President installing solar panels on the White House would signal a sea of change in renewable energy, but with Jimmy Carter’s loss in the 1980 election, the panels came down and haven’t been up since. It’s puzzling that an industry that has the potential to save the planet isn’t thriving, even after decades of development. Especially when one considers how much the technology has improved, with renewables set to be cheaper than fossil fuels in a few scant years.

The reasons behind this are numerous. Many governments remain suspicious of the technology, no doubt thanks to strident lobbying by the fossil fuel industry. When governments have taken action, as with the US under President Obama, the results fell short of admittedly lofty expectations. And the country’s CO2 emissions are set to increase 1 percent in 2018 after a brief period of decline.

However, even the most effective government in the world would find it hard to push the planet into a greener tomorrow. Governments only hold sway over the land within their borders, and even if a major player like China enacted sweeping reforms, it would do little to change matters in the rest of the world. Blockchain technology is uniquely poised to organize global governmental efforts, thanks to its inherent data security and decentralization.

“The main purpose of blockchain in governance, at least in its current guise, is data integrity,” says Jon Martindale in Digital Trends’ “Blockchain Beyond Bitcoin” series released this week. “If more government entities can rely on the integrity of data from partner agencies, then sharing information should make many facets of government more efficient, while also improving security,” Martindale continues.

If we’re going to see a fundamental shift in world energy production, a system that transcends local governments by democratizing data and adding efficiencies offers a significant step forward.

“It turns out that much of the world agrees that we need a reduction of carbon – that’s what cities, countries, and corporations like Microsoft want to achieve. But it’s a very tough objective function for the world to solve for, because if you think of the incentive structure – it’s local – it can’t be traded across geography, so it’s inefficient and temporal,” says Evan Caron, Co-Founder and Managing Director at Swytch, a blockchain platform that verifies and rewards the production of sustainable and renewable energy.

How Green is Our Valley?

Swytch solves one of the most significant factors in lagging renewable energy adoption – the lack of a global and easily tradable incentive mechanism.

The solution is four-fold. First, Swytch collects data from renewable energy producers using existing smart meter technology. This data is ‘stamped’ onto Swytch’s blockchain, then verified and evaluated by a collection of open-source algorithms. Once the algorithms determine the amount of clean energy produced (and by extension the amount of carbon displaced) a corresponding amount of crypto-tokens are minted and delivered to the energy producer.

The tokens are ERC20 compliant and can be converted into fiat currency, other cryptocurrencies, or invested into other renewable projects. In a way, Swytch is the opposite of Bitcoin. Instead of using proof of work, which generates an obscene amount of CO2, Swytch uses proof of production, rewarding reductions in carbon emissions.

The incentive model is scalable, too – everyone from homeowners with solar panels on their roofs to heavy industry leaders able to take part. Entire cities are on board, including six in South Korea, as well as parts of Austria and Germany.

Data is Power

Another issue plaguing renewables is the lack of comprehensive, trustworthy data. It’s currently difficult to gauge where the most energy is being produced and what types of energy is most efficient.

Swytch is seeking to change that through its data collection feature. Every bit of information gathered from energy producers will be made publicly available in order to provide a shared, objective system that anyone can learn from.

As Evan notes, “Anyone in the power business realizes that the more good data there is, the better the whole system is. The data that’s out there is not that great – it comes in slow increments. What we’re betting on is that people want to share the data and if they’re getting compensated for it, they want to do it even more.”

While Swytch’s data aggregation techniques have the potential to revolutionize how information is gathered and shared in the renewable energy market, it’s the platform’s ground-up incentivizing structure that has the most disruptive potential. Through tokenization and the blockchain, Swytch can do what others have not – transcend borders, local politics, and the lingering power of oil and gas conglomerates to bring the world closer to 100 percent sustainable energy.

Where Do Cryptocurrencies Come from Anyway? 0 7520

So you’ve gotten your head around the idea of digital money. You know the difference between Bitcoin and the blockchain. And maybe you even have some credit in your virtual wallet. But have you ever found yourself asking the question – where do cryptocurrencies come from anyway? Here’s a little crash course:

Bitcoin came out in 2009, but the technology was around many years before that. As the first cryptocurrency, Bitcoin was released as an open source project, right around the time of the financial crisis. The identity of Bitcoin’s creator is still not completely certain, although it’s generally believed to be Satoshi Nakamoto, the author of a 2008 white paper describing the cryptocurrency.

Whether or not Nakamoto was the true creator of Bitcoin is somewhat a moot point. For a system to be truly decentralized, with no owners, the creator’s idea was to let the technology evolve and be open to all.

At a time when the financial institutions could no longer be trusted or even accessed, the purpose of cryptocurrency was to bring about a transparent economy. Every individual could manage their own wealth outright. They also had the freedom to make transactions globally, without the intervention or permission of any central authority.

The History of Cryptocurrencies

2009 may have been the year that Bitcoin launched, but the theoretical construct of cryptocurrencies existed long before that. The ideology was the same–that math and computer science could solve problems associated with our traditional fiat currencies.

Few people know this, but it was American cryptographer, David Chaum, who invented the “blinding” algorithm in the 1980s. This is the central algorithm to modern web-based encryption today. It’s thanks to this invention that data can be exchanged between parties securely and without being altered. This paved the way for digital currency exchanges (blinded money).

By the late 1980s, Chaum had mustered a team of supporters for his invention, and founded DigiCash, a for-profit company that mined units of currency based on Chaum’s blinding algorithm. Unlike the decentralized Bitcoin, Chaum had the monopoly on digital cash, making it to all intents and purposes, the same as with financial institutions and fiat currency.

While DigiCash started out dealing direct with individuals, rather than institutions, the Netherland’s Central Bank (where Chaum was now located) banned the idea, forcing DigiCash to sell to licensed banks only.

In what could have been the partnership of the century, Microsoft wanted to team up with DigiCash to allow Windows users in the early days to make digital purchases. The terms were never agreed upon, though, and in the late 1990s, DigiCash went bust.

Cryptocurrencies After DigiCash

There wasn’t a lot of movement in cryptocurrencies after DigiCash. The main focus shifted to electronic financial transactions that were more conventional, but still a breakthrough in convenience and speed. Pioneers, such as PayPal and other similar Alternative Payment Methods (APMs) took up most of the resources and investment.

There were a few DigiCash imitators, such as Russia’s WebMoney, but nothing that really stuck until the late 1990s, when e-gold came out. e-gold wasn’t like DigiCash, in the sense that it was owned by a company that bought gold online. Users sent their old trinkets and jewelry to the e-gold warehouse and received digital currency back. This could be changed for actual gold or US dollars.

e-gold reached millions of active accounts, processing billions of dollars annually. But the company had lax security protocols and was subject to frequent hacking and phishing scams, leaving its users out of pocket. Moreover, the company’s transaction activity fell into the legal spotlight, as its laidback policies made it a tool for money launderers and Ponzi schemes. They finally ceased operations in 2009, by which time, Bitcoin was on the market.

Opening to the public in 2009, supporters quickly began to exchange and mine the currency. By the next year, altcoins began to appear on the market, most notably, Litecoin, and the first public Bitcoin exchanges started to appear as well. By 2012, major merchants began accepting Bitcoin as a legitimate method of payment, including WordPress, Expedia and Microsoft.

Flash forward to 2018, and it’s hard to say if Nakamoto or anyone could have predicted Bitcoin’s meteoric rise. But it would take the powers of Nostradamus to say what place cryptocurrencies will have in our lives in the future.

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