Bill Gates Sounds Alarmed About Bitcoin’s Power Consumption -Here’s Why Crypto Is Bad For Climate Change
TOPLINE As bitcoin moves to new highs, billionaire philanthropist Bill Gates is sounding an alarm about the cryptocurrency’s surprisingly high carbon footprint, which will only get worse as the widespread adoption of the world’s largest cryptocurrency skyrockets as Was expected.
- Bitcoin uses more electricity per transaction than any other method known to mankind, Gates told the New York Times in a recent interview, calling himself a bitcoin skeptic and adding that it’s not a big climate problem.
- For Gates’ point, Alex de Vries, a data scientist at the Dutch Central Bank, estimates that each bitcoin transaction requires an average of 300 kg of carbon dioxide (CO2), equivalent to the carbon footprint produced by approximately 750,000. Visa passes.
- This is because almost all cryptocurrencies, including bitcoin, document every transaction in what is called a public ledger, helping to ensure that transactions are transparent and tamper-proof, but continually require storage space. additional or blocks.
- The blocks are created by miners, who receive bitcoins for their work, running code 24 hours a day on special hardware called platforms, a process that consumes the same amount of energy annually (around 78.5 terawatt-hours) as countries like Chile, Austria, and Finland.
- Compounding the problem, mining networks are primarily based in China, which gets much of its energy from fossil fuels like coal, and as cryptocurrency becomes more popular, its power consumption has increased tenfold since 2017.
- Adding cryptocurrencies to a wallet will make it less environmentally friendly, says Gerald Moser, chief market strategist at Barclays Private Bank, adding that mining generates the same amount of e-waste as countries like Luxembourg, given that equipment mining generally becomes obsolete every 18 years. months or so.
Mining is a process that makes Bitcoin extremely power-hungry by design, as the currency requires a large number of … calculations for its ultimate goal of processing financial transactions without intermediaries (peer-to-peer), says de Vries. who created Digiconomist, a website that tracks bitcoin energy consumption, in 2014.
A single bitcoin transaction uses approximately 707.6 kilowatt-hours of electrical energy, equivalent to the energy consumed by an average American household over 24 days, according to Digiconomist. Annually, bitcoin consumes more energy than all countries except 38, in line with countries such as Finland, Chile, and Austria.
China’s Inner Mongolia region plans to shut down its cryptocurrency mining projects in April after it failed to meet government-set targets to reduce energy consumption in 2019. The United States has not cracked down on the federal level, but some states, like New York and Washington, have. issued restrictions on mining.
We believe that cryptocurrency will eventually be completely powered by clean energy, eliminating its carbon footprint and driving the adoption of renewable energy globally, Square CEO Jack Dorsey said in December when the company announced the launch of its Initiative. . . Bitcoin Clean Energy Investment, an investment of $ 10 million. Fund for companies that make bitcoin mining more energy efficient