How bad is bitcoin for the planet?
The bitcoin gold rush comes with dirty baggage.
Mining the virtual currency and its transactions are estimated to cause more pollution than a small country every year – a fact that companies and proponents are beginning to wake up to.
Elon Musk recently tweeted that Tesla will no longer accept it as payment and he believes the cryptocurrency “has a promising future, but this cannot come at great cost to the environment."
What’s the problem, you may ask?
Bitcoin’s virtual, so it’s not like it’s made from paper or plastic, or even metal.
Bitcoin is created when high-powered computers compete against other machines to solve complex mathematical puzzles.
It’s an energy-intensive process that often relies on electricity generated with fossil fuels.
Greater demand and higher prices have led to more miners competing to win coin, using increasingly powerful computers that need more energy.
At current rates, such bitcoin “mining” devours about the same amount of energy annually as the Netherlands did in 2019, according to the University of Cambridge and the International Energy Agency.
A study in scientific journal Joule estimates that production generates emissions between the levels produced by Jordan and Sri Lanka.
University of Cambridge data shows Chinese miners account for about 70% of production.
They do tend to use renewable energy - mostly hydropower - during the rainy summer months but fossil fuels - primarily coal - for the rest of the year.
Projects from Canada to Siberia are striving for ways to make bitcoin greener and more palatable to mainstream investors.
Blockchain analysis firms say, in theory, it is possible to track the source of bitcoin, raising the possibility that a premium could be charged for green versions.
Some proponents also note that the existing financial system - with its millions of employees and computers in air-conditioned offices - uses large amounts of energy too.
But the dominance of Chinese bitcoin miners - and lack of motivation to move to more expensive renewables - could mean there are few quick fixes to the cryptocurrency's emissions problem.
