Bitcoin Mining And It’s Ecological Impact
By: Aaron Shippey
Tags: Bitcoin, Cryptocurrency, Environmental Issues, Cryptography

Photo by André François McKenzie on Unsplash

The Cryptocurrency movement is increasing in popularity and according to some sources soon to be a field of mass public adoption. This has given rise to an unexpected environmental crisis. In today’s article, I want to discuss the ecological impact of cryptocurrency mining, Bitcoin mining in particular. I will then discuss some possible solutions and finally give my personal input.

But before discussing mining, it’s important to have a basic understanding of what cryptography is. So, let’s take a look.

Cryptography And Encryption

We can distinguish two eras in cryptography: the classic era followed by the computer era. At some point, humans will enter the field of post quantum cryptography. However, to all available public knowledge, there are not currently any quantum computers that are powerful enough to be of threat to the public today.

Before the modern era, cryptography was not unique or separable from encryption. Encryption is simply the method of obscuring original text known as cipher text from its original form, the plaintext. See below.

https://en.wikipedia.org/wiki/Encryption

Blockchain technology is a result of a philosophy known as public key encryption. Whitfield Diffie and Martin Hellman are a duo that initially presented the idea of public key encryption to the public in their 1976 paper, New Directions in Cryptography. According to most experts this was a revolution for the field. Diffie and Hellman received the Turing award by the Association for Computing Machinery (ACM). The Association remarked, “Diffie and Hellman brought public key encryption to the masses.” Public key cryptography has lead to the event of cryptocurrency

Public key cryptography is asymmetric which means both parties have two keys, a public and a private key. Public keys can be openly shared while private keys must remain hidden and unknown to anyone but the owner. If you’ve ever used any online crypto wallet you’ll know exactly what we’re discussing. Blockchain technology is one method in which public key encryption is used. When Bitcoins are mined, the original block is altered and can only be decrypted by the private key address of the transaction’s recipient.

Now, let’s jump into the next topic of discussion.

What Is Bitcoin Mining?

For those unfamiliar with Bitcoin mining, it is essentially running the platform in which Bitcoin transactions take place. Before we further discuss mining let’s refresh our memory with the definition of blockchain. Please see below.

Now, let’s take Bitcoin mining for example. Miners both create new Bitcoins, and also make additions to existing tokens on the blockchain. When a miner introduces a Bitcoin into circulation he/she creates the first entry in the blockchain. Bitcoin miners are more like auditors versus someone doing physically intensive labor.

When Bitcoin was first discovered, the creators intended for miners to work on desktop computers. However, because of the large increase of new miners over the years, competition has increased. Now, to be a miner you must have in your possession state of the art technology known as ASICs or Application Specific Integrated Circuits. These are very expensive and powerful machines.

In order to actually be paid, a miner must have invested hundreds of thousands of dollars into equipment or be a part of a mining pool. And even then the miner must rely exclusively on his technology to solve puzzles faster than the computers of miners he/she is competing with. These puzzles are 64 digit hexadecimal puzzle.(hexadecimal means a numeral system composed of 16 symbols including values 0–9 and a set of letters, for example, A-F).

For those who would like to have more details about these puzzles ,please see the Explain It Like I’m Five Version in the excerpt below.

https://www.investopedia.com/tech/how-does-bitcoin-mining-work/

As we discussed at the beginning of this article, the “mining” these computers are doing is detrimental to the environment. Let’s move on to the next section to discuss more.

Crypto Mining Hotspots & Its Ecological Impact

Most of the world’s Bitcoin mining has taken place in China. According to an article written by Heidi Samford of Washington University, “China has been responsible for approximately 85% of the world’s Bitcoin trading transactions and hosts crypto mines that account for 74% of all Bitcoin mining “hash power.” However, according to the same report China has cracked down in recent years and there has been a transition to more mining in places like North America.

One of the largest Crypto mining farms in the world is in the state of Washington, USA at a place called Salcido Enterprises. According to a 2018 report from the youtube channel, Digital Trends, Salcido enterprises mines .4% of all the world Bitcoin. Now, consider that all the Bitcoin mining in the world collectively adds up to .5% of all global carbon emissions. That means this single Bitcoin farm is responsible for .002% of all the world’s carbon pollution. That might seem like a small rate, but it certainly is quite high for a company who’s annual revenue is $25.2 million.

Some have calculated that all cryptocurrency mining collectively accounts for 1% of all annual carbon emissions. Some have also predicted we could see as much as 5% globally unless current trends are offset.

https://jsis.washington.edu

By exploiting local communities and using incredible amounts of power Bitcoin mining has been the receiver of extremely harsh criticism. An article published by MIT Technology review said, “Bitcoin mining is hugely wasteful.” See below.

https://www.technologyreview.com/

The author is correct because miner’s are not really producing anything physical. Bitcoin itself is merely an abstraction like fiat currency, except it’s entirely digital. And it is costing the planet exponentially more carbon and natural gas emissions to operate the Bitcoin protocol than it is to simply print money.

However, I believe the real issue here is that humans have failed to discover any viable means of alternative energy. We’ll discuss this more in the following section. Let’s take a look.

Hardware and Software Solutions

There are many potential solutions in my understanding that could be undertaken easily if taken seriously. Take a look at the excerpt below.

https://www.leaprate.com/cryptocurrency/mining/rebglo-new-ecological-approach-to-crypto-mining/

According to an article from medium.com, REBGLO technology requires less computing power because “by optimizing the cache memory data, it accelerates the processing speed of the entire system which includes CPU and local memory. Therefore, Mining doesn’t depend solely on the processing speed of the CPU.” According to the same article, REBGLO data transmission technology has shown to increase mining efficiency by 17.2%. It doesn’t specify whether this efficiency rate could be extended to Bitcoin. To my disappointment, I was unable to find any research to back up these claims.

Still, the idea to rely on more powerful software versus hardware is a great idea. If we could discover technology that took away the labor of the hardware machines, I think we could see a great reduction in power use. However, I don’t think we’re going to find a single solution. What we’re looking for are multiple solutions.

According to another article from Medium, one company called FLETA has developed a “cloud” which makes it possible to mine some cryptocurrencies without powerful hardware. According to Fleta’s PoF(Proof-of-Formulation), the cloud or database is run by what they call “formulators,” and “a formulator is a mining node of FLETA”

The Formulators all take part in mining once per “phase,” they call it. After all the nodes have had their turn of “participation” in mining, “a new phase starts.” The rank is set randomly each phase by “changing each Formulator’s hash value into a number through a certain mathematical formula.” Each formulator’s rank changes each phase and there is “no rule for determining the rank.”

To be honest I’m not convinced with the information they’ve put forth that this is a viable solution. I’m not sure how a Bitcoin cloud would work; I wonder if it is too much for an online network to run. However, the general idea is a step in the right direction, and I would be interested to see more data if it’s put forth.

Lastly, let’s take a look at some energy solutions to carbon.

“Green” Energy Solutions

If we really care about helping the environment, then we need to address the root of the problem. Bitcoin mining has become the ecologically detrimental activity that it is because humans have failed to find a healthy and sustainable alternative to fossil fuels. So, event’s like Bitcoin mining are bound to keep happening because humans always fail to address the systemic roots of all problems.

Writer and filmmaker Peter Joseph, talks about this idea as he calls “systems theory” in a book he authored named The New Human Rights Movement. So, let’s take a look at some interesting alternatives which could all be implemented within a decade.

According to an article by which Peter tweeted last week called Geothermal Energy, the Forgotten Renewable, “at the Earth’s iron core sits a nuclear furnace.” We have natural and untapped geothermal plants under the Earth’s surface. MIT estimated that there were 200,000 extra joules of available energy. They say that just 2% of this amount could supply all of Earth with “2000 times the primary energy needs for the entire country.” For most of history, geothermal energy and its potential has been ignored by the public and mainstream academia. However, it’s a viable path that humanity should embark on soon because time is running out.

Considering all the types of natural energy we have available, and the other types we can develop in the future, I’d say there is no excuse for still using natural gas. Let’s solve the bitcoin energy crisis by solving THE “energy crisis.”

Conclusion

The fault alone can’t be placed on cryptocurrency mining. Humans have failed at finding green alternatives to coal and natural gas. If anything we should recognize that cryptocurrency mining and Bitcoin mining in particular have further exposed this predicament.