What makes a crypto currency useful

It has been exactly ten years since Satoshi Nakamoto, the anonymous Bitcoin creator, disappeared from the scene. He "moved on to other projects" was his last public message in April 2011. He (or her?) Has never been heard from since then, and one can only speculate what Nakamoto would think of his work today. At that time, the value of a Bitcoin had just jumped the 1 dollar mark; today the digital currency is quoted above 50,000 US dollars.

But the increase in value alone does not make Bitcoin a success story, because the fundamental technical weaknesses have not changed since then. In short: the higher the market value, the higher the power consumption. Meanwhile, the crypto currency needs as much electricity as all of Sweden, a single Bitcoin transfer requires more than 1000 kilowatt hours - as much as the annual requirement of many a single household. All of this without being able to do much with the currency today other than hoarding it.

Bitcoin is thus on a collision course with all efforts to limit climate change and rebuild the economy in an environmentally friendly manner. One might object that Bitcoin currently only consumes about 0.6 percent of the electricity produced worldwide. But this value can rise quickly. In addition, Bitcoin is only one of hundreds of new digital currencies. Meanwhile, the production of the hardware needed to "mine" bitcoins is clogging capacity in Asian chip factories, contributing to global semiconductor shortages and already delaying the production of electric cars.

Bitcoin users have it in their own hands to reform the digital currency

Bitcoin's growth cannot therefore go on forever. The economist Herbert Stein is credited with the sentence: "If something cannot go on forever, it stops." Only in the case of Bitcoin this will not happen automatically. So what to do

Ultimately, the Bitcoin miners, who generate digital money with the help of energy-intensive special computers, have it in their own hands to convert the digital currency to environmentally friendly processes - simply by means of a software update. The reason they don't is because they fear for their profits from creating money.

You therefore need a good step in the right direction, ideally with the help of taxes. It goes without saying that alcohol or gasoline are taxed - why shouldn't this also apply to CO₂-intensive digital currencies? A tax can affect the energy-hungry production of Bitcoin, the exchange into hard currencies or the manufacture and import of hardware for Bitcoin farms. In this way, Bitcoin users would be involved in the environmental damage for which they are partly responsible, and the state could invest part of the exorbitant profits in more meaningful things.

This will not be easy; in order to be effective, an internationally coordinated approach would be necessary. However, hardly any state is likely to have a great interest in wasting energy, and all the more in new income. Perhaps Bitcoin could still do good in this way - and bring the world a little closer together.