Mining cryptocurrencies is far too energy intensive and is consuming as much electricity as a G-20 economy, International Monetary Fund managing director Christine Lagarde said.
“The bitcoins mining, which is this accelerated and augmented use of computers to actually determine the value and incentive the functioning of the mechanism, is energy angry,” Ms Lagarde said in an interview at the World Economic Forum’s annual meeting in Davos, Switzerland.
“And we figure that, in 2018, if it continues, that system will actually consume as much electricity as Argentina. ”
The electricity needed by the global network of computers running the blockchain technology behind bitcoin has more than tripled in the last year to more than 37 gigawatt-hours a day, according to Bloomberg New Energy Finance. That’s equivalent to about 30 1.2-gigawatt nuclear reactors running at full capacity.
While higher prices have spurred more mining, it’s impossible to know where the market is headed, according to Bloomberg analyst Isabelle Edwards. If prices remain high, energy consumption will do the same. But the amount of electricity needed to mine bitcoins could fall if there are improvements in computing technology.
“In times of climate change and when we look at how much coal is being used in some Chinese provinces to actually mine bitcoin, it’s a big concern,” Ms Lagarde said. – BloombergTags: Argentina, Bitcoin, Business, Christine Lagarde, cryptocurrencies, Currencies & ForEx, Davos, International Monetary Fund, Isabelle Edwards, Markets