environment

This page analyzes the controversial discussions, views and opinions on various social media and blogs as well as other media outlets about the impact of cryptocurrency on the natural environment in terms of applicability, accessibility, affordability in managing environment, and
how blockchain specially Bitcoin will affect the environment in terms of high energy consumptions. It also analyzes the suggestions about making blockchain promote greencoin as an alternative to Bitcoin to reduce emissions. Presenting the views about using Blockchain (Bitcoin) in promoting food security and agricultural productivity. I was little bit constrained by time to conduct more comprehensive research into these controversies. However, what is important here is the fact that the most key common issues with regard to cryptocurrency controversies have been captured in here to enhance further studies.

With the rapid development of technologies in the contemporary world, cryptocurrency is one of the recently developed technologies to easy accessibility and to promote economy through digital currency. Many organizations including public, humanitarian and education institutions have made great stride towards adoption, piloting and integrating the use of crypto-currencies or specifically Bitcoin in their transitions. However, there are still a lot of controversial discussions about the acceptance, adaptability and applicability in really life of these technologies. Academics, businesses, young and elderly people have remained skeptical and need more time for more research into efficiency and safety of utilizations of the growing technological currencies. There is still no clarity of how sure this will operate and how it will serve society. The third sector that is discussing this comprises of experts in different sectors of humanity and sciences who use scientific methods, such as qualitative economic analysis and modelling, in order to explore effects of crytopcurrencies, especially Bitcoin, on environment and on the consumption of energy, trying to understand how this can be used to minimize carbon emission? So this is an analysis of the press discussions and people’s opinions about the growing need and application of cryptocurrency in the contemporary world. It brings together individual opinions and view of various news sources and websites.

One of the key institutions that have expressed their reservations on this development is Australian Future Foundation, an Australian environmental organization. So far in all the ongoing discussions, it has always been Australian academia that presents careful need for understanding the likely impact of Bitcoin on the environment. Australian Long Future Foundation released a report in 2015 indicating that “bitcoin might have a long-term negative impact on Mother Nature, as production could eventually take up roughly 60% of the world’s electricity production. In their research, they calculated the amount of energy bitcoin miners could consume and realized that this requires the same amount of electricity that runs 1.5 billion homes each year” (Australian Long Future Foundation, 2015).

The think tank further stresses by giving figures of how Bitcoin will consume the electricity resulting to more demand for power. “Bitcoin miners can get power cheaply for $0.05 per kilowatt hour (kWh) which means that they get 20 kWh per dollar spent,” noted the group’s website. “As their bitcoin value increases, more people will certainly look to create more bitcoins, the cost and energy used in this process will logically grow so long as people can make money,” explained Lane Hudson 2015 the co-founder of bitcarbon and member of the Australian Think Tank. “There is a lot to be said for bitcoin as a currency, but it may ultimately be fatally flawed because of its growing energy consumption.” the difficulty of solving cryptographic problems in order to mine new bitcoins is constantly growing (it becomes harder and harder to mine a bitcoin, so, we need more and more computational power to mine a new bitcoin). It means that miners have to consume more and more energy because of the very technical algorithm behind Bitcoins that is called Proof of Work. On the other hand, an opinion exists that states blockchain technology could stop climate change which differs from the previous critics of bitcoin miners’ energy consumption. (Edward Dodge, 2015 a blogger says “generally the efforts placed to reduce the carbon emission globally have not been very successful so if blockchain is used, it could be more efficient than the current systems and that measures taken so far by governments while being positive did not work because of political interests of various parties in the discussions and lack of transparency as such a distributed ledger could serve as a base for a better system”. Consequently, the application of blockechain seems to be materializing but crucial potential influencers like the government and other multilateral and bilateral agencies still need more facts about this dream currency before making commitments.

Dodge (24 Sep. 2015) says the new blockchain if used correctly in environmental management will not require much electricity and the consumption overhead will automatically be controlled. Bitcoin mining consumes much power than the underlying blockchain technology. His concept is absolutely new and different from the bitcoin, however using the same blockchain architecture. He called it “greencoin” in some of his papers. According to him, this system will be built on a safe and reliable network. Dodge further quoted the Australian think tank saying “if bitcoin price goes up and reaches $1 million, it would consume 60% of global electricity supply. If Bitcoin’s energy consumption isn’t reined in, we’ll end up being crowded out of electricity networks and sitting in the dark.” World’s first off-set blockchain asset launches.

Impact of Bitcoin energy consumption:

World’s first off-set blockchain asset launches

In 2014 new coin technology was announced built on Blockchain. According to (Fran Strajnar, 2014), “BlockChain Asset Co is a newly created Joint Venture between bitSIM and Conservation Central Network which is the marketing arm of CCN Holdings Limited launched in 2011, aiming to build a global community called the “Green Social Network”. He stated that that “CCN is in the business of saving the forests one hectare at a time using an innovative rewards system to generate profits, bonuses and incentives as a mechanism for business and economic trade not aid”. This advancement has indeed realized a lot of accomplishments since launch in 2014. The have organized several global seminars with multilateral agencies like UNDP/UNEP in 2016, they also won MIT 2015 global plan and organized. Their work is quite becoming globally known among organizations and governments lobbying for emission free world. However, at the moment they operate voluntarily as they solicit funds and partners with climate concerned vision.

Negative impact of bitcoins on energy:

It has been described by many writers pointing out the direct risks of using bitcoin technology. Many have pointed out the risks of terrorist intrusion in the blockchains, issues of money laundry, under looking the taxation system and usage of the actual money, but the actual problem, where we still need to do more researches on the impact of bitcoin, is the environmental damage it causes, namely because of the amount of energy it uses while running the computers (John Quiggin, 2015). This argument was further stressed by Stephen Lam who is also a frequent writer on ABC News saying that “vast amounts of electricity go into feeding the Bitcoin delusion but fortunately, it is unlikely that the digital currency will survive long enough to generate the environmental disaster that would arise if it became a major part of the financial system”.

Bitcoins VS Environmental Economics

Despite the enormous impacts of the Bitcoin mining on electricity, some experts are considering looking beyond the power consumption and focus on the amount of carbon dioxide produced in the process. Danny Bradbur (2014) measures the amount of carbon produced as equivalent to burning 16 gallons of gasoline. He further says, this means the entire bitcoin network uses slightly more power than it takes to run the US treasury for a year. This implies more carbon will be produced and raising the cost of paying to abate the greenhouse gas. However, Bradbur refers to possible solutions for carbon abatement through the Bitcoin Platform. He gives further example in the below quote. “Solarcoin, for example, is designed to underpin renewable energy credits, meaning that when you trade them, you’re supporting a market that rewards the production of solar energy. Another digital currency, called carboncoin, is styling itself as a carbon-offset coin. Its anonymous manager, who calls himself ‘Axis Mundi’, explains that it started off as a pre-mined coin without a carbon-offset focus, but the developer gave up the coin and sold his pre-mine. Mundi is trying to repurpose the coin as part of a carbon-offset initiative”. From this example we see that in order to rethink the environment-friendly usage of cryptocurrencies, different projects propose to change the principle of proof of work and replace it with alternative mining mechanisms, such as proof of stake that does not depend on computational power and thus reduces the consumption of energy. We can say that it is not the cryptocurrency itself that is harmful for the environment, but the current mining algorithm based on a rising difficulty of calculations” (Axis Mundi, 2014)

The Controversial forum discussions:

The Australian Think Tank platform created an interactive forum for many concerned people to exchange and express their views about the importance of Blockchain and Bitcoin in particular because it is at the moment the most widely used and known cryptocurrency. The Long Future Foundation website made a full calculations based on the fact that Bitcoin is valued at 1 million British Pounds. They said “the cost of mining this resource is $500,000 and 3,600 bitcoins are produced every day.” Bitcoin miners can get power cheaply for $0.05 per kilowatt hour (kWh) which means that they get 20 kWh per dollar spent notes the website. By multiplying these numbers (500,000 x 20 x 3,600 x 365) on its Bitcurrent calculator – an interactive spreadsheet – the foundation arrives at the conclusion that bitcoin mines would consume 13,140,000,000,000 kWh – or 13,140 terawatt hours (TWh) – per annum, or the amount of energy required to power 1.5bn homes”. Further to this, Guy Lane, an environmental scientist and spokesperson for the foundation, stated: “While Bitcoin is a virtual currency, it has very real economic, social and environmental effects” (Lane Hudson, 2015). Lane further said that the miners of Bitcoin are most likely to spend million-dollar bitcoin on mining expecting more people to create Bitcoin and as they do that, more pressure will be exerted on energy motivated by the money they will make in the process.

However, this debate about how Bitcoin consumes energy and the future likely creation of more Bitcoin and its impact on Environment, the Bitcoin mining Community members like Sam Cole, a co-founder of KnCminer AB, informed CoinDesk disputing the finding from the research done by the Australian Think Tank saying, “The main thing that they appear to be missing is that the amount of coins released to the network is halved every four years. The people who produced the report are very bullish on the coin price”. This triggered further justification by Lane, the spokesperson of the Australian Think Tank, defending that the foundations findings were based on scientific understanding of the technological and economic systems of the Bitcoin. Lane presented his argument by giving an example as “if bitcoin replaces gold and the US dollar as global currency, maybe $1m is a low figure. Even of bitcoin only gets to $400,000 it still consumes 23% of global electricity supply” he added.

The most important counter argument was made by Dave Hudson, author at HashingIt, a blog specializing in statistics of bitcoin ecosystem. Dave Hudson acknowledges the fact that the Tink Tank Foundation was not fundamentally incorrect, he believes that their argument underlines only the negative effects of Bitcoin rather than weighing both sides. This was neither accepted by Lane of the Foundation that the presented argument was rather subjective. Despite these claims, Hudson still agrees: “if potential profit margins from bitcoin mining were large, this would incentivize people to continue reaping the profits and one unfortunate consequence of this is energy use” Hudson said. However, Hudson continued to justify his disagreement with the figures of consumption of energy by mining the bitcoin which the foundation put as being 3,600 bitcoins produced daily. Whereas according to Hudson, if bitcoin production starts at 3,600 in the first year, the second year it drops to 1,800 and the next it will further drop to probably 900 bitcoins a day eventually reducing on the risks of high energy consumptions. as we see, one of the main arguments in defense of Bitcoins is relying on an important technical principle, that of the price halving, that is at the same time a technical mechanism and an organizational principle helping to manage the mining activities and control Bitcoin amount and price. This mechanism is said to moderate (lower) the environmental impact of Bitcoins.

The use of Blockchain in Agriculture and Environmental sustainability.

Blockchain can transform the Agricultural Industry, as Jamie Redman (2016) says. He states that while agriculture is the biggest economic industry in the world, that employs about 40% of the global workforce, there is a strong need to find all possibilities of using the appropriate technology to improve resilience, accessibility, affordability and safety by all. According to Redman, Blockchain is the possibility for transforming the sector for booming the economy. As the analysis of the discussions on specialized forums show, agriculture has also picked the need to modify the sector and integrate technologies that can make life easier for the producers and consumers. There are three key possible agricultural areas where blockchain is highly needed and indeed could create more impact while saving the environment.
This includes:

1. provenance and radical transparency

2. mobile payments, credits, and decreased transaction fees and

3. real-time management of supply chain transactions and financing (Emma Weston, 2016).

According to Weston, “Smart farms is a form of sustainable agriculture that aims to enhance our environmental quality, integrate technology with natural biological cycle controls and create economic viability within farm operations which uses blockchain technology to broadcast tamper-resistant weather data, SMS alerts, machinery protocol, GPS positioning and tether many more precision agriculture- related platforms”. We see that the actors who promote usage of blockchains in agriculture, underline a specific component of blockchain technology, that of smart contracts that make possible a smart system where several sources of data (sensors, weather data, user-generated data) can be automatically managed and thus help to improve and optimize the activities of agricultural workers.

Cryptocurrencies have raised a lot of controversial discussion among various sectors of the society. The concept is generally acceptable but everyone is conscious and not ready to make any rush in deciding promotions of any one of the cryptocurrencies. At the moment the main dominating currency is the Bitcoin. Many researchers and academics are putting all the efforts to understand the impact of Bitcoin on the public resources like energy in terms of its load and consumption now and in future considering its rapid growth. Other people are piloting the application of blockchain into promotion and development of the agricultural sector. Meanwhile other topics in discussion include possibility of using the Blockchain in curbing and in carbon Jamie Redman, 2016) training as a reliable and transparent tool. From the discussions presented in this report, there is no any more chance the Cryptocurrency will not survive. Bitcoin and many other coins will definitely develop further if the mining communities consider the views and suggestions made during these controversial discussions positive and use it for improving their productivity and services to the customers.

CREDITS:
Olivier Michael

SOURCES:

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(Weston E. & Holet S., 2016) From Bitcoin to Agriculture. (Retrieved from web below)
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