-Analysis-
Bitcoin's blistering price rise has broken a new milestone, passing the $10,000 threshold for the first time. It's a considerable achievement given that the most famous of cryptocurrencies was worth under $1,000 at the beginning of this year, and first reached $2,000 just a few months ago. But it's also a frightening feat.
The fears go beyond the rumblings of a new speculative bubble around the revolutionary (and still largely untested) virtual financial mechanism. Bitcoin's surge is also a cause for concern for a less obvious reason: the environment.
Yes, bitcoins are bad for the planet. Despite being a digital currency, bitcoins exist in limited supply and they need to be "mined," (a virtual variation on the way we mine gold, for instance). This is done by solving extremely complex mathematical problems, which requires a lot of very tangible and very powerful computers — and therefore an awful lot of electricity.
Each Bitcoin transaction now uses as much energy as an average U.S. home does in an entire week.
The more bitcoins are mined, the more difficult these problems become and, consequently, the more computing power and electrical energy is needed.
Recent research conducted by the website Digiconomist has shown that Bitcoin mining alone now consumes more electricity in a year than the whole of Ireland, and more than most African countries. By another measure, each Bitcoin transaction now uses as much energy as an average U.S. home does in an entire week.
But this is not the only innovation, billed as inherently beneficial, that comes with an environmental downside. For years now, electric cars have been touted as a welcome and necessary alternative to internal-combustion vehicles and their CO2 emissions. The most recent electric vehicle unveiling came earlier this month, when Tesla announced Tesla Semi, an electric truck with a 500-mile range and a quick-charge system. And yet, already, questions are being raised about the electrical capabilities required, with a report estimating that one Tesla truck will need the energy of about 4,000 homes to recharge.
This quest for money and (electric) power comes full circle with the recent news that some owners of Tesla vehicles have equipped their cars with computer units so as to be able to mine Bitcoins while charging their cars at free charging stations.
For all the technological prowess behind both Bitcoin and Tesla, the urgent question of ecology requires some rather simple math: Will it raise or lower the temperature of the planet?
