The true cost of Bitcoin
Bitcoin is in a feverish bubble. I’m bullish on blockchain technology, but I believe the stratospheric price rise we’re experiencing today (from $960 at the start of 2017 to 10x that today) is not one of our finest moments. Our human minds are addicted to greed, but terrible at weighing externalities. The money everyone is making today overshadows the environmental cost. Although improvements have been made recently, Bitcoin is still an incredibly resource intensive protocol. Bitcoin mining now consumes more electricity per year then the country of Ireland. At current growth rates, Bitcoin will consume all of the world’s electricity by February 2020 (1). It won’t be long before we will have to start construction of a Dyson solar shell around our sun to keep the network growing. Something’s going to have to give.
We know all too well the story of Easter Island. Today it seems silly that’s a society would consume all of its resources in the pursuit of carving stone faces. But it’s completely rational that we’re burning vast amounts of Chinese coal for magic internet money.
I love crypto. I heat my house with Ethereum miners that run on green electricity. My hope is that Bitcoin will end this bull run gracefully, and give way to new protocols that provide even more value, without the environmental cost.