The bitcoin industry fares poorly when it comes to energy consumption. Environmental groups are urging the popular cryptocurrency to reduce its ecological footprint. According to them, a simple change in the algorithm would change everything.
Posted at 6:00 a.m.
If bitcoin were a country, it would occupy the 23and world rank for its energy consumption. This is at least the estimate made by the cryptocurrency analysis platform Digiconomist.
For the Dutchman Alex de Vries, founder of the platform, this statistic is alarming. “There is a strong link between the price of bitcoin and its environmental impact, he argues. Last year, bitcoin’s price peaked, so its energy consumption also peaked. »
This energy sinkhole comes from bitcoin mining. The people who participate in the system, the miners, must equip themselves with energy-intensive computers put at the service of the network in exchange for rewards in bitcoins. The system is said to be “by proof of work”. The more powerful the miners’ computers, the more their chances of being rewarded increase.
Where is all this energy coming from? According to research published in the journal The Joule, in which Alex de Vries participated, it came from 75% of non-renewable sources last August.
Miners do not care about the source of their energy. They need stable and affordable energy, which naturally leads them to fossil fuels.
Alex de Vries, founder of Digiconomist
However, environmental groups want to change the way things are done. A coalition including Greenpeace USA and the Environmental Working Group launched the “Change the code, not the climate” campaign on March 29.
“We know that a basic change in software code would reduce bitcoin’s power consumption by 99.9%,” the campaign proclaims.
The change to be made would be in the system by proof of work. What is proposed is an alternative system, called “proof of stake”, where acquiring more and more powerful computers would be useless.
“In a proof-of-stake system, all you need is access to a device with an internet connection,” explains Alex de Vries. There is no machinery competition. »
The campaign calls on influential cryptocurrency players to pressure the bitcoin community to switch to this system.
The challenge of renewable energies
The chances of bitcoin embracing this paradigm shift are slim for now. Some bitcoin miners have invested fortunes in powerful equipment based on the current system.
“All of bitcoin’s security and vision is based on proof of work,” says Joseph Pallant, who created the Blockchain for Climate Foundation for greener cryptocurrencies. I don’t expect that to change. »
According to Mr. Pallant, it would be more realistic to minimize the environmental footprint of bitcoin by betting on renewable energies. “And when that’s not possible, you have to compensate, for example, with carbon credits,” he says.
The Quebec bitcoin industry can also boast of relying more than 99% on renewable energies for its electricity. Some initiatives even propose to reuse the heat produced by bitcoin mining to heat buildings, such as at the church of Saint-Adrien, in the Chaudière-Appalaches region.
The fact remains that the production capacities of renewable energies in the world are limited. In Quebec, current production will no longer be sufficient to meet demand as of 2027, according to Hydro-Quebec estimates.
“This electricity consumed for the production of bitcoins could be much better used in Quebec in a context of climate crisis and dependence on hydrocarbons in the various sectors of the economy”, insists Patrick Bonin, of Greenpeace Canada.
With the current state of technology and no regulation for cryptocurrency, it is clearly a drag on the climate fight. All the gains we can make, we have to make them.
Patrick Bonin, of Greenpeace Canada
Although not universally accepted, the proof-of-stake system is growing in popularity. “Most of the new cryptocurrencies use this system, underlines Joseph Pallant. They have very low carbon footprints. »
Ethereum has decided to follow suit. The world’s second largest cryptocurrency, after bitcoin, is in the process of transitioning from proof-of-work to proof-of-stake.
“The greatest hope is that Ethereum, which has planned to make this change for a long time, manages to do so this year and sets an example for Bitcoin, concludes Alex de Vries. So, maybe Bitcoin will reconsider the option. »