Watch: How Bitcoin is Fueling the Climate Crisis and a Software Change Could Clean It Up
March 29, 2022
So you’ve heard Greenpeace USA is talking about Bitcoin, now? Our senior campaigner, Rolf Skar, answers our questions about this new coalition-driven campaign and why it is so critical to keeping our planet and communities safe from the worst effects of climate change.
Hi Rolf, thanks for taking the time today. Let’s start at the beginning. What is Bitcoin?
Bitcoin is a digital currency that works without a centralized bank or government. It’s a “peer-to-peer” system that allows people to pay for goods and services or simply invest in it with the hope that it will increase in value. When Bitcoin launched in 2009, it was revolutionary, inspiring the creation and use of other “cryptocurrencies” (like Bitcoin) and financial tools based on technologies called blockchain which independently verify each and every transaction, almost like a bank would but without the bank.
These transparent digital “ledgers” document every transaction ever made on the system. That technical innovation replaces personal trust (“will this check bounce?”) or the approval of a bank or government to guarantee transactions between parties. To update and maintain this ledger, Bitcoin “miners” employ specialized high-speed computers and are rewarded with newly minted digital coins, which can be highly lucrative.
Woah that’s a lot of new terminology, thanks. Why is it that all of a sudden I’m hearing a ton about Bitcoin, and why is Greenpeace USA talking about it?
There are lots of opinions about Bitcoin. Is it a good investment? Is this the future of money, or is it all a scam? We are not weighing in on those questions. One thing we do know is that the Bitcoin system’s use of electricity is skyrocketing. That is because of the way Bitcoin works. Its code uses a deliberately laborious “Proof of Work” (PoW) protocol to build security into its system. Technical details aside, PoW is a lot of what it sounds like. It depends on a lot of work – in this case, by specialized, power-hungry digital mining machines. As the machines get faster, they compete against each other in a technological arms race. As that happens, the system adjusts, upping the amount of work required as mining machines get faster. The code is wasteful by design. It uses all the work to make it too hard for its record of transactions and holdings to be compromised by bad guys.
So… Bitcoin is “wasteful by design” and that means?
Exactly what you’re probably thinking. Bitcoin – as it exists today – is BAD for our planet and communities. For years Bitcoin’s electricity use was relatively small. As the value of Bitcoin increased and as faster, specialized machines took over the mining process, its electricity consumption has sky-rocketed. According to researchers at the University of Cambridge, Bitcoin’s electricity usage is comparable to that of many mid-sized countries–like Sweden. In too many cases, that electricity is being generated by burning climate-polluting fossil fuels. If this trend continues, this big problem for our climate could become a lot worse. As climate scientists have been telling us for years, we need to rapidly phase out the use of fossil fuels, but we are seeing many Bitcoin mining operations do the exact opposite.
What Can Be Done About Bitcoin’s Energy Use?
Bitcoin’s “Proof of Work” (PoW) protocol was revolutionary in 2009, but it is now having unintended consequences for our climate and our future. Thankfully, Bitcoin’s code can be updated to avoid all the “work” required by PoW by shifting to a “Proof of Stake” (PoS) approach which could use 99% LESS energy. This newer way of ensuring security and transparency is already used by most other cryptocurrencies. Ethereum, another well-established digital currency, is in the process of switching from PoW to PoS. If smaller cryptocurrencies are doing this, Bitcoin could too. The technical challenges for Bitcoin to do the same can be surmounted. The real problem is whether, in a decentralized system, enough people can build the support needed to make it happen.
OK. I think I get it. But what is Greenpeace USA doing to get Bitcoin to change the code?
We launched a campaign with friends at Environmental Working Group and several groups battling Bitcoin mining facilities in their communities to push Bitcoin to change its software code to use far less energy. In short: we’re pushing Bitcoin to change its code – not the climate. The campaign website, www.cleanupbitcoin.com is where you can go to join us and learn more.
No matter who you are or what your background, no matter how you feel about Bitcoin, to help build support for a code change that will make our planet and our communities safer from the destructive impacts of climate change. If you are concerned about pollution, extinction, or the climate crisis, add your voice to a chorus to change the code.
Got it. But, a few more questions to make sure I understand. Why can’t Bitcoin just use clean energy?
Why not just use solar panels to power Bitcoin mining? Well, that’s certainly better than coal or gas. But we already have a deficit of clean energy to power our homes, businesses and industry – things that cannot quickly become more energy efficient. And when we look at not only the US, but at Bitcoin mining around the world, there’s no way to ensure fossil fuels and other polluting sources will – somehow – be magically phased out. Like a lot of things in our world, we can’t depend on partial fixes. We need a systemic shift.
What about banning Bitcoin mining altogether?
When China, previously the number one site of Bitcoin mining, banned the practice in 2021, new mining operations popped up elsewhere almost overnight, and it became more polluting than ever. Banning Bitcoin mining in individual US states or the whole country would just move the problem somewhere else. We cannot just export our problems elsewhere, like rich countries have down with plastic waste for many years. We share one climate, so emissions anywhere will affect people everywhere.
Thank you so much, Rolf, for answering all our questions. Remind me again how I can get involved?
If you are concerned at all about pollution, extinction, or the climate crisis, we need you. You can add your voice to help us Change the Code, Not the Climate by signing up on the campaign website, www.cleanupbitcoin.com.