The Real-World Costs of the Digital Race for Bitcoin - The World News

The Real-World Costs of the Digital Race for Bitcoin

Some in the industry have pushed back against suggestions that it is directly responsible for any environmental harm.

A May 2022 letter to the Environmental Protection Agency, signed by many of the biggest companies, said their operations “released” no pollutants. “Bitcoin miners have no emissions whatsoever,” it said. “Associated emissions are a function of electricity generation.”

Nic Carter, a partner at a crypto-focused venture capital firm and a prominent Bitcoin advocate who told The Times he was the letter’s primary author, said he was playing a “language game” when he wrote that Bitcoin mining has no emissions. At the time, he said, he felt the industry was being unfairly singled out.

“Maybe the more sincere point is like, we’re already fully aware of the emissions associated with utilities generating grid power,” he said.

Many academics who study the energy industry said Bitcoin mining was undoubtedly having significant environmental effects.

“They’re adding hundreds of megawatts of new demand when we already face the need to rapidly cut fossil power,” said Jesse Jenkins, a Princeton professor who studies electrical grid emissions.

“If you care about climate change,” he added, “then that’s a problem.”

Bitcoin, conceived in 2008, introduced most of the world to the concept of cryptocurrencies. Instead of trusting banks to track the value of accounts, the system publishes transactions on a public ledger called a blockchain. Proponents said that cutting out middlemen would free people from financial institutions, government oversight and fees.

So-called mining is a fundamental part of the system: When a computer guesses correctly, it updates the ledger and collects six and a quarter new Bitcoins. Then the guessing game begins again.

Initially, hobbyists could win with personal computers, but as the value of each Bitcoin soared — from under $1,000 in 2017 to above $60,000 in 2021 — mining increasingly became an industrial endeavor. (The price has since dropped and, as of publication, was roughly $28,000.)

The only way for miners to better their odds is to add computing power, which requires more electricity. But as the number of guesses increases, the algorithm makes the game more difficult. This has created an energy arms race.

The mines’ scale can draw gasps from people in the power industry. A one-megawatt mine consumes more energy each day than a typical U.S. home does in two years. The electricity coursing through a 100-megawatt operation at a given moment could power about half the homes in Cleveland, according to federal data.

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