Huge concrete data centers permanently connected to power plants and telephone exchanges keep a large part of online life going. But the infrastructure behind internet-based cryptocurrencies such as Bitcoin, Dogecoin and Ethereum is more like a rusty traveling circus. And this circus is on the way right now.
Bitcoin relies on a network of millions of specialized machines known as miners, about 70% of which are currently based in China. Like a never ending game of Hungry hippos, every player hammers his mining machines around the clock to siphon off as much bitcoins as possible. With just a few hippos, it’s easy for anyone to be a winner. But with around 2.5 million Miners chasing after a decreasing number of prizes the game becomes more and more difficult.
Bitcoin’s booming popularity has led to it Electricity demand increases. Without central planning, an eternal arms race for equipment continues and creates 15,000 tons of burned-out electronic waste annually.
In order to maximize profit, mining machines are often called machines crammed into shipping containers, with operators always ready to assemble sticks to find the cheapest sources of energy. During the Chinese summer rainy season, hydropower plants in the southwestern provinces generate so much energy that miners can clean up the remains. But in the winter dry season, many miners pull the plug and get on your way, on the way to the coal-fired power plants scattered across China’s vast northern areas.
Bitcoins Energy Bitcoin Demand has more than doubled in one year from 55 terawatt hours (TWh) to 125 TWh. The network now has a carbon footprint similar to that of all of Poland. Chinese regulators have shut down all of the country’s crypto exchanges in 2017. Even so, the soaring demand for Bitcoin elsewhere means that the network’s energy consumption in China is expected to peak by 2024 at around 300 TWh. That equates to the UK’s total energy needs. With a crypto circus in tow, Beijing’s commitments to Reduce CO2 emissions by 65% before 2030 would be almost impossible to meet.
Bitcoin isn’t just China’s problem
In an attempt to reduce bitcoins Environmental impact in China, Inner Mongolia’s coal-dependent province, recently banned bitcoin mining and Set up hotline to report suspected violators. But on average, only one bitcoin is mined per day requires $ 1.8 million (£ 1.3m) investment in specialty equipment. Evictions from the province could force some heavily invested bitcoiners underground while others may be forced to find new parking spaces in neighboring countries that do not have China’s seasonal renewable energy flood.
To prevent, Influx of Chinese miners on the hunt for cheaper electricity, the Iranian President recently clamped about the new oil-powered mining that the authorities To blame for increasing urban smog. The Black Sea area of Abkhazia is try to hold back Foreign miners as civil servants are forced to introduce rolling power outages due to energy shortages. Bitcoin mining was accused overloaded power lines and power plant fires, which means that some areas remain without electricity for days.
The British authorities have also paid the price for the Bitcoin boom. In May 2021, West Midlands Police officers in the UK who believed they had raided an illegal cannabis farm in Sandwell spotted around instead 100 bitcoin mining machines run an improvised connection to the power grid. The obsolete machines were so inefficient that they could only make a profit with stolen energy. These thefts Increase energy prices for everyone elseleading to fuel poverty and public safety.
Antisocial side effects
The demand for mining equipment has created shortages in computer chips, hurt other useful industries Difficulty getting back to work after COVID. British automakers have cut production while smartphone companies have delayed future starts. The prices for specialty chips used by Intel and Apple are around. gone up around 70% so far in 2021, with repercussions for UK consumers.
Even Universities and Hospitals are affected by the second-order effects of Bitcoin. According to the insurer HiscoxAround 4,500 organizations fell victim to cyber attacks every day in the UK in 2018. Many of them concern Ransomware payments, of which 98% paid with bitcoin.
Some argue that in order to slow the rise in ransomware attacks, the authorities crack down on cryptocurrency exchanges which allow payment of Bitcoin ransom. Others claim that cryptocurrencies and ransomware are now so intertwined that the only way to combat the latter is to ban cryptocurrencies altogether.
To clean up the crypto industry, a UN supported Crypto climate agreement and the Bitcoin Miners’ Council were introduced. These groups urge US bitcoin miners to use only leftover renewable energy. However, it is not possible to give a higher price to bitcoins that are only made from renewable energy, as bitcoins are completely interchangeable. Research shows that new miners joining the competition in North America have encouraged non-renewable energy miners to use more machines and work harder, increasing network capacity Total carbon footprint.
A global answer
For regulatory reasons, Bitcoin should be viewed similarly to the global trade in Chinese tiger parts. The UK’s ban on tiger hunting is pointless, but the ban on the sale of tiger parts makes sense. If UK-based investors are also allowed to speculate in Bitcoin, they are fueling an environmentally disastrous global industry that has so far benefited no one except for criminals and some early speculators.
Tackling crypto exchanges or banning the import and use of mining equipment could be a relatively easy victory for the UK as it prepares to host the UN climate summit in 2021. Failure to address the problem would undermine UK progress in other areas. Thanks to tax breaks and infrastructure investments, electric car registrations increased by 41% in 2020, prevents the release of around 50 million tons CO₂ per year. In the meantime, Bitcoin mining is almost causing 60 million tons CO₂ annually.