Posted on August 30, 2018 by Stephen Gidiere
I have a confession to make. I just couldn’t resist. I know it was foolish. But, yes, it’s true—I own bitcoin. To be exact, I own 0.00108151 bitcoin. I even have a bitcoin “wallet,” which is nothing more than an app on my phone that I transferred some money (I’m sorry, dollars) into.
I have another confession to make. Although I have read article after article about “crypto-currencies” and the technology underlying them—blockchain—I really do not fully comprehend it. I get that it’s a method of digitally validating transactions using a decentralized network of computers. And that bitcoin is a way of compensating people who do the validating. But that’s about as far as it goes for me. I thought that buying my 0.00108151 bitcoin would give me some insight into the whole process, but really I am just out about $35 so far.
But what I have gained is some appreciation for the environmental cost of bitcoin and, by extension, the paperless, digital world that we live in. On the surface, going to a paperless currency—or paperless anything—seems like plus on the environmental side. No cutting down trees. No printing process with solvents and other waste. No transportation with greenhouse gas emissions.
Yet the environmental impact of the digital currency, though unseen by most, is substantial. Running all those computers uses substantial amounts of electricity. In fact, the cost of running the computers is the major limiting factor in bitcoin mining operations (basically server farms). I have read that investors are flocking to areas of the country with low cost power—like Washington State, rich with cheap hydro power. And I have recently read about one community in Texas where it is reported that a bitcoin mining operation will start up at a retired aluminum smelting plant, to take advantage of the energy infrastructure already in place.
With the price of bitcoin fluctuating widely (including in my bitcoin wallet), is this sustainable? There is a real risk of energy infrastructure being built and then abandoned—who gets stuck with those stranded costs? What about all those servers, creating mountains of electronic waste? Will the bitcoin rush leave a trail of destruction, like virtual tailing piles from the California Gold Rush? So I’m thinking—maybe I should cash in what’s left of my bitcoin and fold it up in my real wallet to do my part.