The mainstream media had a field day on Monday when a ‘research paper’ was published on Nature.com which purported to show how Bitcoin’s growth would ultimately lead to the planet’s doom.
While most mainstream news outlets continue to run with the story, claiming that widespread Bitcoin adoption would lead to a boiling of the oceans, the truth behind the headlines is a lot less sensational.
The ‘paper’, which was actually published under the comment section of the website, has zero citations and has already come under fire for making some irrelevant assumptions in its calculations.
The first is in the way it measures the projected carbon output produced by Bitcoin mining. As pointed out by blockchain entrepreneur, Nic Carter on Twitter:
“They estimate bitcoin’s energy usage by taking the total energy cost of bitcoin and dividing that by the number of transactions in 2017, and then extrapolating that figure to **314 billion transactions**…”
Indeed, according to the paper itself:
“For each year, we calculated the average and lower and upper quantiles of per cent population using all technologies and applied a logistic model to such trends. The projected trends of technology usage adoption were used to estimate likely Bitcoin usage assuming a global total of ~314.2 billion cashless transactions.”
The 314 billion figure appears to be a yearly estimate, and works out at around 860 million transactions per day. Right now, payment processor Visa handles around 150 million transactions per day.
The paper also uses average energy-use figures from each Bitcoin-mining country in its calculations. This effectively discounts the growing number of green-energy farms which have popped up to power BTC mining, since such energy sources are unlikely to rank highly within a given country’s average.
Given that China remains host to the largest concentration of Bitcoin miners, one imagines the data would be skewed by the nation’s excessive fossil fuel consumption – most of which is used to power industries completely unrelated to Bitcoin or cryptocurrency mining.
As summed up succinctly by Carter, in order for the assumptions in the article to hold true, the following would have to occur:
“- bitcoin’s issuance would have to become fixed, with no decrease
– all L2 tech would have to evaporate
– btc would have to scale up to 314b txns ON CHAIN
– miners would need to use the local energy mix precisely
– blocks would have to be 3.2 GB…”
And of course, all of this comes before we take into consideration any possible advances in technology.
The readiness with which the mainstream ran with this story suggests either a misunderstanding of the facts, or perhaps simply an urge to grab some headlines during a quiet bear market.
However, the apparent coordination of the story’s release among media outlets has prompted fears of purposeful FUD and misinformation among many in a community which is already conspiratorially minded.
NOTE: The paper is hidden behind a paywall on Nature.com, but can be read using online tools which grant free access to scientific papers for those resourceful enough to find them.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock.