It Turns Out That Bitcoin Isn’t Just Annoying, It’s Also Terribly Energy Inefficient

Charles Q. Choi, in a 2019 article for IEEE Spectrum:

A major weakness of Bitcoin is the extraordinary amounts of energy it demands, and the vast amounts of the global warming gas carbon dioxide it spews out as a result. Bitcoin reportedly has a global electricity consumption approaching that of the entire nation of Austria, and a global carbon footprint comparable to that of Denmark.

I will be the first to admit that I don’t fully understand how cryptocurrencies like Bitcoin really work. I think most of the people who devote a lot of time and energy to it are nerds who need to get a life (and if you ever ask a retail employee if their establishment accepts bitcoin, you deserved to be ridiculed and shamed until you leave, you fucking dweeb). That said, I have a general understanding of how the concept (and I did buy some DOGE a year ago as an experiment), including how the mining process works, but I had no idea how much energy it wastes.

[One] potential flaw in any digital cash scheme would permit a digital token to get spent more than once. 

To solve this problem, Bitcoin broadcasts messages to its entire network to get everyone to confirm each transaction, all to prevent malicious […] players from cheating. Bitcoin achieves such consensus by implementing a blockchain, which is a secure ledger of all transactions in the system that is maintained by its community of users instead of any intermediary such as a bank.

In order for blockchains to reach consensus on the validity of all transactions, users must execute complex, energy-intensive computing “proof of work” tasks. […]

However, [some computer scientists] argue that Bitcoin and other cryptocurrencies based on blockchains are essentially overkill. They suggest that solving the problem of double-spending does not require the complex task of achieving consensus. Instead, much simpler, faster, and less energy-intensive algorithms can suffice.

The latest algorithms the scientists developed broadcast messages about each transaction in a manner similar to gossip: one user tells a small group about the transaction, and they go on to inform others about it, and so on, with the message spreading to a growing number of participants in the system in an exponential manner. […]

[Then,] instead of seeking consensus from every participant in the system for each transaction, the algorithms check to see if a random sample of users has received messages about each transaction. If this sample is sufficiently large, the chance that malicious attackers can fool the system into thinking another transaction occurred is lowered enough to ensure that such hacks do not occur within the age of the universe, the researchers say.

[…]

The consensusless algorithms also generate just a few grams of carbon dioxide per transaction, compared to an estimated 300 kilograms per Bitcoin transaction. In addition, while the original Bitcoin protocol took up to an hour to confirm that a transaction went through correctly, the Swiss team’s prototype algorithms can do so in less than a second.

This seems like a promising system. Hopefully there will be a way for established cryptocurrencies to take advantage of it, but I seriously doubt it. That said, if we can’t find a way to make cryptocurrency work that isn’t so preposterously bad for the environment — whether through the methods these researchers proposed or through some other method — then the entire idea deserves to be abandoned. It bears repeating: a single Bitcoin transaction produces 300 kilograms of carbon dioxide. That is atrocious.