According to MarketWatch, Bitcoin mining requires so much energy that it could pose a threat to the international Paris Agreement, which was designed in 2015 to reduce the amount of greenhouse gas emissions released into the earth’s atmosphere.
MarketWatch mentioned that John Truby, an associate professor of law and the director the Center for Law & Development at Qatar University, published a study in the journal Energy Research & Social Science that demonstrated that the Paris Agreement is currently under threat due to the increasing number of proof-of-work (PoW) mining machines and their energy-intensive mining process. These machines are currently responsible for releasing high levels of carbon emissions into the atmosphere.
“Despite digital currencies providing considerable potential transactional, security, and financial access benefits, the design of Bitcoin’s mining and trading system requires such a vast consumption of electricity that it is equivalent to powering Denmark,” Truby wrote in his study. “This threatens the planet to the extent that intervention is necessary to prevent similar models emerging.”
What is the Paris Agreement?
The Paris Agreement was created in December 2015 as a part of the United Nations Framework Convention on Climate Change’s (UNFCCC) efforts to combat climate change. More specifically, the agreement is intended to increase certain environmental actions required to reduce the number of carbon emissions released into the atmosphere. Many consider the climate-change accord to be a positive way to bring together different nations and unite them under a common cause to combat climate change.
According to the UNFCCC website, the organization’s goal is to ensure that global temperature remains below 2 degrees Celsius above pre-industrial levels and to undergo sustained efforts to limit temperature increases even further to 1.5 degrees Celsius.
Bitcoin Mining is a Major Concern for Climate Change
According to the Bitcoin Energy Consumption Index, Bitcoin’s annual electricity consumption currently sits at 73.12 TWh. The amount has increased almost 400 percent over the last year as seen in Truby’s study. Bitcoin mining consumes so much energy that mining a single Bitcoin could provide almost the same amount of electricity for a house in Britain for the duration of a month.
Cryptocurrency mining is, therefore, a significant concern when it comes to climate change. Bitcoin’s value currently sits at $7,591.61 as of August 3, 2018. As Bitcoin’s value increases, there will be more Bitcoin miners who flock to the market. The increase in miners along with the ever-increasing difficulty of the mining algorithm can potentially cause each mining machine to expend even more energy as they compete with one another.
While government intervention may be possible, Bitcoin’s decentralized blockchain network could make this intervention fairly difficult. According to Truby’s interpretation of the Paris Agreement, “technology should be utilized to achieve greenhouse gas mitigation, whereas a highly polluting use of technology would very much go against the spirit of the agreement, if not the commitments made.”
In theory, government intervention is not only possible, but highly recommended in light of the Paris Agreement.
Proof of Stake (PoS) Vs Proof of Work (PoW)
Another alternative is to change Bitcoin’s proof-of-work (PoW) protocol in favor of another algorithm that consumes less energy, like proof-of-stake (PoS). Under PoW, miners are rewarded when they solve an extremely difficult computational puzzle. Performing the necessary computational work requires a significant amount of energy.
PoS, on the other hand, predetermines the creator of a new block and skips the computational work. MarketWatch noted that the creator of a block is rewarded with a transaction fee instead of a block and therefore requires significantly less energy than PoW.
Truby, however, believes that whichever protocol the cryptocurrency community adopts, the discussion should not focus on arguing the basis of the technology. It should instead address the environmental problems and issues that it currently causes.
“As the underlying technology can offer significant benefits, it is here to stay, so future models must be designed without reliance on energy consumption so disproportionate to their economic or social benefits,” said Truby.
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