Receipts for gifs are killing the climate

Crypto has spent about 10 years fighting for legitimacy in some form or another. Bros pretending they've figured out decentralisation of currency, ending the tyrrany of fiat forever. When in reality, they've just misplaced pretty neat database technology to pretend to be innovative.

Explain the tech

From NYT

Foundationally, the blockchain is a fantastic way of creating a database that can act in a decentralised manner while passing atomicity (that is, the transactions happen entirely, or not at all).

The most common application of blockchain technology has been crypto currencies. Which by-and-large (but not always), require mining. Mining is the method by which new coins are created on the network; by using computing power to solve complex logical problems. The more activity on the network trying to solve these problems, the more difficult the problem will become, thus making it more difficult to mine a coin. Which is why people like me managed to mine a coin over a decade ago on a laptop, and today lunatics are spending thousands on facilities jammed with graphics cards.

The current yield of a normal coin is less than the cost of mining when considering the cost of graphics cards, which are required for the type of computation needed for mining. And more importantly here, electricity to run those cards.

Yet a new application has come onto the scene. Non-fungible tokens, or NFTs for short. These are a new kind of implementation of a smart contract, which tokenise a transaction so that it can be traced from one transaction to another, passing an asset along. No, NFTs are not an expensive JPEG of a monkey smoking weed. Worse, they're an expensive receipt for a JPEG of a monkey smoking weed.

The carbon cost

Forget the monopoly money values associated with crypto and NFTs, let's look at the carbon cost. If carbon was considered an asset in the same way that crypto currency or NFTs were, we'd be massively concerned about the expiring tokens.

The maintenance of the worldwide Bitcoin network required 90.86 TWh and 37.97 MtCO2eq within a single year, 2020 to 2021, according to a key study on the subject. While Bitcoin itself could be mined with 100% renewable, carbon-neutral energy, this is not the case. Miners optimise for profitability by keeping their cost as low as possible, even if the exchange of mining exceeds the value derived from a mined coin.

Looking at reports via Cambridge University, the electricity consumption to keep the bitcoin network active is skyrocketing. This is as a result of the network effects required to mine coins in ever-complex algorithms.

via Cambridge University

In short, we're edging closer to bitcoin alone, a fringe technology at best, consuming upwards of 1% of all electricity produced on earth in a single year. This equates to a modest sized countries' needs, one third of residential AC in the US, and upwards of 10x the cost of Googles entire global operations.

Put into "offset" terms, offsetting Bitcoin’s carbon footprint would require planting 300 million new trees. And I know I'm singling out Bitcoin, but the data is easier to get for it. Etherium, an increasingly popular crypto variant, operates about half as bad as Bitcoin. So there's very little good news there. Though ETH does have mechanisms to reward miners using green tech or aiming for carbon neutrality.

To conclude

I've very little positive to say here, frankly. Bitcoin is a scourge on the climate. It's grotesque mis-application of a wonderful technology being idolised by bros who couldn't care less because the short-term financial gains from owning an easily replicated image is reward above and beyond the disastrous life their kids or grandkids would have as a result of soaring temperatures, rising seas and population migration at a level humanities' never seen.

The fundamental technology is great. It's current application isn't. It needs global recognition as a problem, regulation to solve for it and apply it in a way that isn't an absolute disaster for our climate. 1% of global electricity consumption should not be going towards a receipt for a JPEG. We need to face the reality of what's happening to the species.