A few members of our banking team recently attended a conference where the main topic discussed was the environmental impact of Bitcoin. It posed the challenging question about ‘how mining Bitcoin can be sustained environmentally’, as the cryptocurrency continues to rise in value but with it, its energy consumption.
A single Bitcoin transaction requires as much energy as 10 households in one week, reports Motherboard. This is due to the computer power required to solve the mathematical puzzles required to maintain the integrity of the blockchain, powered (mainly) by fossil fuels. Worldwide this equates to more power used in some African countries.
This presents a huge ethical question as to whether Bitcoin, and any other virtual currency, can be mined without boosting energy consumption and thus, without increasing pollution. A question that is threatening to halt the rise of cryptocurrencies.
Companies around the world are looking for the answer within renewable energy. Austrian company HydroMiner GmbH is using hydropower to generate bitcoin. It installs shipping containers with servers and software and places them at power stations, keeping them cool by circulating cold Alpine currents. It takes advantage of over 2,000 idle hydropower stations in the country. Whilst being environmentally friendly, they also make a profit from the low price per kilowatt-hour.
An organisation in the Netherlands, the Institute of Human Obsolescence (IoHO) takes it a lot further. It has done experiments in mining cryptocurrencies by harvesting human body heat. It required humans to lie still for several hours whilst their excess body heat was captured through wearable thermoelectric generators.
The energy created was very small – 0.6 watthours per human – equating in the mining of one Bitcoin a month by harvesting the body heat from 44,000 people. But the effort is not to be frowned at. It has given voice to the issue of the ethical sustainability of Bitcoin. We don’t have the answer yet, but we do know that it does not lie within conventional fossil fuels.
We will continue to watch this space closely – a fascinating, but very pressing, debate.