‘Bitcoin [Mining] Threatens Our Existence’ Academic Says, Calls for Intervention
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The ever-increasing amounts of electricity that bitcoin mining consumes threaten to reverse the efforts and gains made so far in mitigating greenhouse gas emissions, an academic has claimed.
According to Dr. Jon Truby, the director of the Centre for Law and Development at Qatar University, bitcoin was designed with no considerations made on its environmental impact and as such ‘threatens our existence’. Truby has thus called for solutions aimed at preventing similar blockchain technologies from emerging.
Here to Stay
In Truby’s view bitcoin as well as other cryptocurrencies cannot be wished away and it is therefore necessary for future models of their underlying technology to adopt environment-friendly designs.
“The problem will only worsen. The higher the value of Bitcoin, the greater the incentive to mine, and new digital currencies will be developed with similar carbonized models…” wrote Truby. “However, as the underlying technology can offer significant benefits, it is here to stay, so future models must be designed without reliance on energy consumption so disproportionate to their economic or social benefits.”
Among the proposals aimed at encouraging a shift towards blockchain technologies that are less energy intensive that Truby has put forward in the paper titled ‘Decarbonizing Bitcoin: Law and policy choices for reducing the energy consumption of Blockchain technologies and digital currencies’ include government intervention.
Regulatory Measures
Truby, for instance, calls for the introduction of regulations which prevent developers from creating blockchains that exceed a particular level of carbon emissions per gigahash. Besides using regulations to incentivize the development of less energy intensive blockchains, Truby also proposes the use of alternative fiscal tools including academic research funds, government grants or creating a business-friendly safe space for developers of environment-friendly blockchains.
Additionally, Truby advocates the introduction of policies aimed at restricting the kind of devices used in bitcoin mining. This could include taxes such as value-added taxes being slapped on less-efficient bitcoin miners.
“The goal of any intervention focused upon the machinery would be to indirectly impact upon the behavior of developers, motivating them to amend the model of existing and particularly future systems towards a less polluting and more sustainable transaction verification model,” argues Truby. “It could also motivate manufacturers of such devices to produce low energy versions.”
No Easy Solutions
The Qatar University academic, however, noted that such a move unless rolled out uniformly across the globe, a near-impossible task, would have the effect of shifting bitcoin mining from hostile jurisdictions to friendly ones. It could also move mining underground.
Besides government intervention Truby also notes in his paper that if allowed a free hand, the market possesses the capacity to rectify the situation by letting the electricity prices shape the behavior of the bitcoin mining sector.
Featured image from Shutterstock.
