University of Qatar: Bitcoin’s environmental impact calls for government intervention
Discussions about the environmental impact and sustainability of Bitcoin have been going on for a long time. A scientific article by the University of Qatar has now come to the conclusion that government intervention will be necessary in the future due to high energy consumption. Thus appropriate taxes could lower its demand. In addition, incentives for alternative blockchain technologies and new consensus modes are needed. While these are being used more and more, the Association of Research Centres for Energy Economics emphasises that the energy problem of the blockchain is „solvable“.
The growing energy demand in the cryptosector endangers the environment and the sustainable survival on earth. This is the basis on which Jon Truby, scientist at Qatar University, argues in his recent research.
His cryptosoft thesis:
By consuming huge amounts of energy every year, Bitcoin undermines global efforts against climate change and Parisian climate tobacco. This overshadows the benefits of the cryptosoft blockchain.
„The huge trust benefits for transaction security are eclipsed by Bitcoin’s deliberate resource-intensive design. These verification processes now threaten the climate on which we depend for our survival.“
Crypto trader response: Limiting demand
State intervention and fiscal compensation are needed to promote crypto trader alternatives and reduce demand for Bitcoin. „The applications of the technology (such as digital currencies or smart contracts) can be targeted to limit the crypto trader demand for the development and use of particularly energy-intensive technologies and to promote sustainable alternatives, the jurist is sure.
According to Truby, viable legal options represent internationally coordinated taxes on prospecting processes, transkations or the ownership of Bitcoin.
In March, the G20 ministers had already decided to introduce common tax standards. Their focus, however, is on avoiding money laundering and the criminal use of crypto currencies – not their possession and use per se.
This means that there are already links in the tax handling of Bitcoin. However, it is questionable whether environmentally-centred initiatives such as those brought into play by Truby will soon be implemented, especially in light of the hesitant climate protection policy.