By Eric Holthaus
If you’re like me, you’ve probably been ignoring the bitcoin phenomenon for years — because it seemed too complex, far-fetched, or maybe even too libertarian. But if you have any interest in a future where the world moves beyond fossil fuels, you and I should both start paying attention now.
Last week, the value of a single bitcoin broke the $10,000 barrier for the first time. Over the weekend, the price nearly hit $12,000. At the beginning of this year, it was less than $1,000.
If you had bought $100 in bitcoin back in 2011, your investment would be worth nearly $4 million today. All over the internet there are stories of people who treated their friends to lunch a few years ago and, as a novelty, paid with bitcoin. Those same people are now realizing that if they’d just paid in cash and held onto their digital currency, they’d now have enough money to buy a house.
That sort of precipitous rise is stunning, of course, but bitcoin wasn’t intended to be an investment instrument. Its creators envisioned it as a replacement for money itself — a decentralized, secure, anonymous method for transferring value between people.
But what they might not have accounted for is how much of an energy suck the computer network behind bitcoin could one day become. Simply put, bitcoin is slowing the effort to achieve a rapid transition away from fossil fuels. What’s more, this is just the beginning. Given its rapidly growing climate footprint, bitcoin is a malignant development, and it’s getting worse.
Cryptocurrencies like bitcoin provide a unique service: Financial transactions that don’t require governments to issue currency or banks to process payments. Writing in the Atlantic, Derek Thompson calls bitcoin an “ingenious and potentially transformative technology” that the entire economy could be built on — the currency equivalent of the internet. Some are even speculating that bitcoin could someday make the U.S. dollar obsolete.
But the rise of bitcoin is also happening at a specific moment in history…