Is Bitcoin Bad For The Environment?

Bitcoin has been slowly gaining traction among tech enthusiasts as a way to transfer money across the globe without the added time or cost of a third-party intermediary. The cryptocurrency has struggled to gain mainstream approval due to public mistrust after several high-profile scandals depicted bitcoin as a tool for criminal activity and scams.

Now, a report from an Australian think-tank suggests that bitcoin may have another drawback — its impact on the environment.

Bitcoin Eats Up Energy

Australia's Long Future Foundation figured out that bitcoin production could eventually take up roughly 60 percent of the world's electricity production. The foundation created a calculator that took into account the amount of energy bitcoin miners could consume, and found that they require the same amount of electricity that runs 1.5 billion homes each year.

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Miners Disagree

However, bitcoin miners refuted the foundation's findings saying that although the calculations are accurate, they don't take into account the actual bitcoin network. Every year, the number of coins available to be mined is reduced, meaning that using the number of coins mined this year is inaccurate for years in the future. Others say that although the argument has some merit, bitcoin's threat to the environment is a far off notion considering the cryptocurrency has only been around for a few years.

An Important Consideration

Still, the Long Future Foundation said it is important to address the energy concerns that bitcoin could create before they become a problem. Guy Lane, a spokesperson for the foundation, told CoinDesk that the bitcoin community shouldn't ignore the economic, social and environmental effects the cryptocurrency could have. According to Lane, "Bitcoin has the potential to have an enormous impact on our global resources and energy use if not managed properly."