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Human Rights Violations, Bitcoin and Climate Change: From Xinjiang to El Salvador
Embraced by messianic traders enthralled by the potential of evading central authorities including banks and governments, Bitcoin is so environmentally destructive that it could threaten any gains resulting from the transition to electric vehicles, not to mention reductions in fossil fuel use. Bitcoin, which has gone from being a mere novelty to becoming a viable investment, refers to the name of the payment network on which this particular form of digital currency is stored and moved. The advantage of Bitcoin is that there are no transaction fees, and it makes sending money across national borders much easier. The disadvantage, however, is that Bitcoin may attract tax evaders, criminals and terrorists since such transactions are anonymous.
Bitcoin transactions are verified via a global and decentralized network of computers. The latter are wired together throughout the world in makeshift warehouses, and are referred to, somewhat oddly, as “mining rigs.” Computers race to verify blocks of transactions adding to Bitcoin’s “block-chain,” which acts as a kind of public ledger. The winner is rewarded in new Bitcoins, but the entire process consumes a lot of energy --- the lion’s share of which comes from fossil fuels --- since mining rigs are comprised of powerful computers working in tandem to solve complex mathematical problems. Bitcoin is so damaging to the environment that experts estimate the digital token now consumes more energy than the whole of Argentina, a nation of 45 million people. Indeed, the carbon footprint of a sole Bitcoin transaction is equivalent to almost two million Visa transactions, and 135,229 hours watching YouTube.
Concentration Camps, Bitcoin Mining and Climate Change
Spreading around the world, Bitcoin has set up shop in areas plagued by human rights abuses and environmental degradation. Take, for example, the northwest Chinese region of Xinjiang: for years, air and water pollution, desertification and overall ecological distress have turned the area into one of the unhealthiest regions in the country. Xinjiang not only consumes large quantities of coal, but also provides the rest of China with substantial amounts of the fuel. Unfortunately, coal burning releases nitrogen oxide, sulfur dioxide and particulate matter, all of which are dangerous in high doses.
Xinjiang is also vulnerable to climate change, since the region is arid and depends on water from surrounding glaciers located in the mountains, as well as lakes. Over time, the former have been melting, while the latter have been drastically shrinking due to climate-related drought and other human-related activities. Needless to say, the disappearance of glaciers could decimate Xinjiang’s rich culture and native Uighur Muslim people. Meanwhile, even as they suffer the brunt of climate change, Uighurs have been subjected to a campaign of genocide at the hands of authorities in Beijing. Indeed, an estimated one million Uighurs have been held in supposed “re-education camps” in which detainees are reportedly subjected to rape, torture and forced sterilization.
Given rampant human rights violations and environmental abuse, Xinjiang should be the last area of the globe subjected to Bitcoin activity, yet that is exactly what has happened. Perhaps that isn’t so surprising, however, given that Xinjiang, with its share of ultra-cheap coal-powered electricity, is an attractive source of energy. Up until recently, the region was responsible for a significant portion of Bitcoin mining. To be precise, while China was reportedly responsible for a whopping 65% of all global Bitcoin mining, 36% of such mining took place in Xinjiang. Last year, however, China banned all domestic crypto mining, citing concerns about crypto’s effect on the environment and people employing digital currencies for fraud and money laundering.
Cool Millenial Bitcoin Dictator
Though Bitcoin has proved to be too much of a wildcard even for the draconian Chinese Communist Party, that hasn’t prevented other governments from embracing crypto-currencies. Take, for example, El Salvadoran President Nayib Bukele, who has enthusiastically promoted Bitcoin in the Central American nation. Like Xi Jinping, Bitcoin-savvy Bukele has pushed anti-democratic practices with scant regard for human rights. After securing a supermajority in the legislature, the president’s coalition removed the attorney general, and, in short order, Bukele pushed through an extension to his presidential term beyond normal limits. In addition, the president has sought to intimidate and harass civil society groups, conducted raids of non-governmental organizations, pushed arbitrary investigations against independent media, and cracked down on free speech by blocking journalists’ Twitter accounts. Though some have described Bukele as a “millennial autocrat,” the president has embraced such views, and openly refers to himself as “the world’s coolest dictator” on his Twitter profile.
In light of El Salvador’s severe environmental challenges, the turn towards crypto-currencies is troubling. For years, in fact, the tiny poverty-stricken country has suffered from deforestation and land degradation, to say nothing of climate change. Indeed, El Salvador has been afflicted by drought, hurricanes, forest fires and floods. The Pacific coastline, meanwhile, is at risk from El Niño events and sea-level rise. Farmers are particularly vulnerable to climate change, with sorghum, maize, rice, coffee and sugar being particularly affected. Global warming has chased away seasonal rains, with drought and lack of food driving northern migration. Given these underlying environmental problems, it is ironic, and that is putting it mildly, that El Salvador is turning to Bitcoin. Currently, the country does not produce enough energy to meet its existing needs, and must import 25 percent of its electricity from elsewhere in the region. As a result, Bukele seeks to mine Bitcoin with energy emanating from Salvadoran volcanoes, no less. The president claims his wild scheme, which calls for the country’s state-owned geothermal electrical company to dedicate a 95-megawatt facility to crypto-currency, amounts to “green bitcoin mining.”
Welcome to “Bitcoin City”
Environmentalists, however, have questioned the plan, which loftily aspires to constructing an isolated “Bitcoin City,” with funding for the settlement coming from a $1 billion Bitcoin-backed “volcano bond.” Under the initiative, half the funding will go towards purchasing more Bitcoin, while the other half will be employed for infrastructure and Bitcoin mining linked to geothermal power emanating from the Conchagua volcano. Though Bukele claims Bitcoin City will be carbon neutral, the environmental footprint could prove astronomical, since Bitcoin’s carbon emissions naturally increase or decrease based on prices at any given time. Environmentalists, in fact, believe Bukele’s scheme is utterly hair-brained, since geothermal energy costs more than oil. The entire plan, they say, could wind up being an ecological boondoggle, while El Salvador’s new digital currency milieu might also attract criminal drug lords.
In tandem with his “cool, dictatorial” personality, Bukele reportedly pushed through a Bitcoin tender law without debate. Government plans to lure foreign investors, including Bukele’s $1 billion Bitcoin-backed bond, economic zones featuring lax regulations, tax breaks and even permanent residency for top-tier investors, were largely carried out by a tight-knit group of presidential advisers, many of whom were foreigners themselves. While crafting his new policies, Bukele frames his support for Bitcoin as being forward-looking and even utopian, though activists would certainly beg to disagree. In particular, many have questioned the so-called “Bitcoin wallet” app Chivo, which in Spanish slang means “cool.” Concerned about volatility and lack of transparency about Chivo, as well as public money that would go towards the app, thousands have protested in the streets of San Salvador against the government. Unfortunately, some who have questioned Bitcoin wallet have found themselves detained and investigated, which is certainly ironic, given that Bitcoin has long been held up as a symbol of freedom from banks and governments.
Bitcoin’s Political Spectrum
There’s got to be a more concerted pushback against Bitcoin, not just in El Salvador but in other countries as well. Disappointingly, however, crypto-currency has been embraced across the political spectrum. With its opposition to central bank control, Bitcoin grew out of the so-called “cypherpunk” movement of the 1990s. Based in San Francisco, cypher punks took advantage of cryptography for political ends and experimented with digital cash. Despite its edgy and slightly anarchistic origins, Bitcoin has more recently been embraced by right-wing libertarians, which makes sense given the latter’s disdain of government action designed to address climate change. While libertarians are prone to deny it, Bitcoin trading has also become increasingly popular with white supremacists and neo-Nazis. Even more bizarrely, Bitcoin has made for other unusual bedfellow including crypto mayors such as New York’s Eric Adams, a Democrat, and Francis Suarez of Miami, a Republican.
Perhaps, some will be dissuaded from investing in crypto-currencies following staggering recent losses in the market. Historically, however, Bitcoin has spanned generational bounds, with growing numbers of millennials and Gen Z flocking to buy up crypto-currency. Such developments are rather ironic, given that younger people are reportedly very concerned about climate change. Even more glaring, some climate change activists own crypto-currencies themselves, and, when pressed, such folk claim that Bitcoin takes power away from central banks and large institutions which have supported fossil fuels. Whether such Bitcoin boosters are even remotely aware of Xinjiang or protests far afield in countries like El Salvador, however, seems doubtful. Sizing up the Bitcoin phenomenon, some experts have put it rather aptly: “despite grand statements about reducing transaction costs and liberation from ‘fiat’ money, none of the legitimate players have made a case for crypto contributions to general welfare. Beyond rhetoric they have not even seriously attempted to. Instead, they have relied on the naivete of lawmakers, regulators and journalists.”