Bitcoin surpassed $60.000 on Saturday, continuing its frantic course. Especially if you consider that it welcomed the new year, at $37.000, in mid-February it broke, for the first time in his history the $50,000 barrier and now it is heading for glory once again.
At the same time, however, apart from the (many) other “asterisks” that accompany this whole affair, there is also the energy dimension which is becoming more and more problematic.
This is because, as recent research has shown, along with the price of Bitcoin, the needs for electricity that it requires in order to be “mined”, according to the appropriate terminology, have also skyrocketed.
Thus, the famous cryptocurrency is estimated to consume about 121.36 TWh per year, i.e. one breath from Norway (with 122.20 TWh) and more than Argentina (121 TWh), the Netherlands (108.8 TWh), the United Arab Emirates (113.20 TWh) and a number of other countries.
In other words, if Bitcoin were a country it would belong to the list of the 30 most energy consuming ones.
The reasons for this have been explained and relate to how it is created and “certified” among users. As it is a peer-to-peer digital currency, which is not regulated by a central bank, its users themselves record their transactions and assure each other who owns what, maintaining a common digital file. All this building is based on a huge and ever-increasing number of computers around the world, which based on blockchain technology, perform continuous mathematical calculations and compete with each other to solve mathematical problems, with a prize for the winners, new Bitcoins. To get players to the so-called “mining”, they are constantly adding computers that work at full capacity, consuming more and more energy, which in turn is expensive, and at the same time burdens the environment due to CO2 emissions.
In an age of heightened awareness of the effects of climate change and with investment funds now heading too seriously for ESG “green” criteria and “rules”, energy-intensive cryptocurrency is becoming unattractive to institutional investors. At the same time, targeting others, such as Elon Musk.
The big boss of Tesla is already accused by many that his company, due to its pioneering actions, only last year received $1.5 billion from environmental subsidies and spent the same amount on Bitcoin, which mined mainly by electricity from carbon.
The popular cryptocurrency can break one record after another, however it is faced with both the direct, -for its users-, and the indirect, -for the environment-, “cost” of the exorbitant energy consumption.
There are already many who suggest the imposition of a “carbon tax” on cryptocurrencies. But many are now worried, in addition to the danger of the “bubble”, for another question: How much “credibility” can a coin have that if it comes out of the “socket” will lead to “quick death”?