In the past five years, the price of a Bitcoin has rocketed from about $1,000 to more than $60,000. That’s great news for newly minted millionaires and billionaires, but it’s a bummer for the environment. The electricity needed to “mine” the coins— effectively deploying vast fleets of computers to solve complex problems—has increased tenfold over the same period, to almost as much as the entire country of Argentina uses.
That power consumption spurred Tesla Inc. Chief Executive Officer Elon Musk to ban car purchases with Bitcoin, and China prohibited mining in part because of the burden it placed on its power grid. “If Bitcoin continues to be seen as carbon-intensive and energy-hungry, it’s a massive risk,” says Kirsteen Harrison, a sustainability strategist at Zumo Financial Services, a cryptocurrency wallet company in the U.K.
In response, some miners have located their computers in places such as Iceland or Sweden, with abundant geothermal or hydropower, and others have bought carbon credits to offset their emissions. But with every kilowatt of greener energy needed for cooking food, heating homes, or moving people and goods, there’s an increasingly urgent sense that cryptocurrencies should find a better way to do business. “A limited amount of clean energy will be built in the coming years, and that should go toward cleaning up existing energy demands,” says Ben Hertz-Shargel of energy consultant Wood Mackenzie.
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