It’s a disaster. There’s no point messing around. Let’s kill it now
Bitcoin (and its many mutations and outgrowths) is a planetary-scale mistake, a whiny tech-bro fantasy and an environmental catastrophe that’s already happening. A sane world would pass a UN resolution, add a Bitcoin annexe to the Paris agreement, reclassify the Blockchain as an illegal weapon and pull the plug on the whole cryptocurrency disaster.
The problem is Proof of Work, the ingenious technology that underlies Bitcoin and substitutes the deliberate expenditure of energy for old-fashioned, fiduciary trust in verifying financial transactions. Proof of Work allows users of Bitcoin to trust transactions even when they have no idea who originated them and in the absence of a trusted issuer?—?like a Central Bank.
To be clear, Proof of Work is clever (it was originally invented to make it harder to send spam email)?—?an intriguing thought experiment. It’s also a terrible idea. Proof of Work literally burns the planet in order not to have to rely on a central banker. Consequently it’s become the ultimate libertarian ‘fuck you’ to normies and communists and eco-freaks. It’s financial fracking.
Bitcoin is already out of control. Like a laboratory experiment in a movie that looked kind of interesting but by the time the scientists realised what it could do it was already too late because it had been released from the lab by a disgruntled technician and is now eating the world.
Meanwhile, out there in the world, many otherwise sensible people are apparently hypnotised by Bitcoin and the Blockchain (which, terrifyingly, generalises Proof of Work to the whole world economy) much as they were by the web and computers (and coal-fired power stations and asbestos and radon and the mercury they used to cure the felt for top hats…).
Governments, regulators and investors, instead of pulling on their superhero suits and figuring out a way to uproot Bitcoin and throw it into a volcano, are doing the opposite. They’re funding the construction of an increasingly elaborate and toxic network of Blockchain technologies and businesses, appointing ‘Blockchain Czars’, funding research, funneling money to the crypto fanatics, and coming up with increasingly stupid ways to apply Blockchain everywhere (a famous global consulting firm is even trying to promote Brexit and the Blockchain as a kind of hideous, conjoined opportunity for Britain).
And the consequences are already obvious. Proof of Work, by design, uses fantastic quantities of electricity and mountains of special-purpose computing kit. Worse, the algorithm makes the task more difficult as times passes, specifically to prevent Moore’s Law from reducing the cost of participation.
So, as Bitcoin is issued, the miners who do the work of verifying transactions and creating new coins?—?often in locations that are already under environmental stress or where electricity is subsidised or easily stolen?—?use more and more power.
The economics of Bitcoin mining is obscure (and contested?—?see the comments from crypto fans at the bottom of this post, too) and the arbitrary difficulty of verifying blocks can go down as well as up but the bottom line is that issuing all of the possible Bitcoins will cost the planet a staggering, possibly unsupportably large amount of energy, cancelling environmental gains made elsewhere and pushing energy sustainability further into the future, even in the best case for mining efficiency. We definitely can’t afford this.
Right now, mining Bitcoin is using as much electricity as the nation of Austria. The Bitcoin fanatics dispute these numbers (“No way! Definitely not Austria! Maybe Ireland.”) and wave their hands, vaguely promising alternatives to Proof of Work and ranting about the cost of running the hated fiat system. They rave that the pressure of having to mine more and more pointless Bitcoin (and Ethereum and Dogecoin and whatevercoin…) will somehow force the energy giants to innovate, to invest in renewables and?—?seriously?—?to get nuclear fusion working before Bitcoin melts the ice caps.
And that’s just Bitcoin. There are dozens (hundreds) of other Proof of Work-based currencies and hundreds of other products and technologies and services based on the Blockchain either live or in the pipeline. An investment boom is under way. And as international governance breaks down?—?you know: Trump, Brexit, nationalism, climate-driven conflict and migration, civil war and cyberwar?—?acting collectively to control or shut down Bitcoin looks less and less likely.
Is this how it will actually end? With the hum of a billion mining rigs ultimately drowned out by the gurgling inrush of the sea?
The problem is compounded now by the fact that Bitcoin is effectively impossible to kill. You can’t unmine bitcoins?—?and even if you could it would probably cost as much power as mining them (intriguingly, we might be able to burn them, though). You can’t stop a transnational, decentralised mining effort that has the organisational logic of a cult and is already accustomed to operating in secret, at the end of country lanes in poor regions (and pretty soon under the sodding sea).
As Bitcoin grows, the only effective way to stop the miners and the evangelists from taking the planet down with them?—?while they continue to fantasise applications for the Blockchain and gloss over its unarguably disastrous cost?—?is to keep the value of the currency below the cost of mining the coins, making it pointless to run a mining rig. Doing this will be hard, though. Satoshi’s algorithm provides clever incentives to keep miners mining and hordes of deranged HODLERS are already committed to keeping Bitcoin’s value up, way beyond any rational ceiling. Dark new libertarian-nationalist alliances will see Bitcoin as part of their fight-back against globalism and the hated, money-printing central banks. This shit could get real.
But it might be possible to slow the juggernaut down enough to allow it to quietly die, to become an authentic anthropocene fossil. If governments were to collectively outlaw cryptocurrencies, for instance, if utilities refused to supply power to miners (and, hey, if responsible citizens resolved to spend their weekends locating and smashing up the rigs. Go Luddites!), we might just add enough cost to make operating the network pointless. Once the economics of mining turns negative there’ll be no reason for the miners to get up in the morning. They’ll power down their rigs and go back to synthesising ketamine or coding botnets or whatever they were doing before. The network will fade away. The value of Bitcoin will collapse, the cryptocurrency experiment will end.