Campaigners against climate change have been shocked with a new statistic from Cambridge University researchers who have revealed that Bitcoin mining now consumes more energy than the entirety of Argentina, around 121.36 terawatt-hours a year.
Bitcoin is a blockchain cryptocurrency that relies on verifications from computers within its network to maintain the integrity of transactions within the system. Computers that partake in this process are sporadically rewarded with the bitcoin currency, and this process is known as ‘mining’.
Whilst in its early days, an individual with a home computer might play a role in this process, the majority of mining is now done on a larger scale. Warehouses are now filled with often specially-modified computers that serve no purpose other than to solve the equations in the bitcoin system in return for bitcoins. Often these compounds are located in extremely cold locations to make the cooling of the computers feasible. Even in the places best equipped for this demand, such as Iceland, industrial fans are needed to stop the hardware from overheating.
The total amount of bitcoin distributed over time is not dependent on how much mining occurs. A bitcoin is released about once every ten minutes. Therefore, promises of faster computers do not even mean more bitcoin, and as the amount of bitcoin released decreases over time, more power will have to be invested to mine as much bitcoin. It is therefore a technology destined for energy inefficiency.
Written testimony presented to the U.S. Senate Committee on Energy and Natural Resources in August 2018 claims that bitcoin mining accounts for about 1% of the world’s energy consumption.
However, a more flawed premise has mainly gone unchallenged by media reporting on the most recent revelation of bitcoin’s inefficiency. So normalised has the glorification of finance become that many seemed to have forgot that not only will 1 bitcoin require increasing amounts of energy to compete for, but a bitcoin has no productive value at all.
In our nation’s capital, many of the country’s best paid people’s only job is to move around the money of even richer men. Tyrants like Warren Buffet have amassed more wealth than some nations merely for the unproductive job of manipulating the numbers in the computer systems that are almost completely detached from humans.
In this final stage of capitalism, as the rate of profits fall and there are no new lands to conquer, resources are siphoned away from people’s needs to feed the hysteria of financialisation.
Capitalism, for all its flaws, spurred the world economy’s growth as factories sprung up and towns became cities, although with much bloodshed. In many countries this promised economic development has been prevented by the greed and hostility of the system’s origin countries.
As the planet sits on this uneven excess of resources, capitalists have sooner turned the focus onto these unproductive theatrics that reinforce their wealth rather than start building on capitalism’s gains and bringing prosperity to the world.
For the last four centuries, the world’s poverty rates have dropped at a rate never before known to humankind.
If we exclude Communist China, the number of people in poverty across the world has been increasing since the 1980s.
The gains of the last few centuries have had diminishing returns and are now being reversed as the environment collapses and we move away from the productivity that brought us the steam engine, the assembly line and much of modern life, to the playground of oligarchs like Elon Musk where electricity is now being used to power computers in warehouses for virtual currencies.
Arguments for the ‘efficiency’ of capitalism have long been redundant. As we race against the clock to prevent climate change, it is absurd that we could reduce the world’s energy consumption by 1% (not an amount to be sniffed at) just by turning away from this single unproductive distraction.
Capitalism has played its historical role and we must now not only move past it because it has become frivolous, but because its frivolity is quite literally sapping the world of its power and its ability to sustain human life.
Mally Kakembo, is a member of YCL Wales