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Vancouver mayor Ken Sim wants to transfer some of the city's financial reserves into Bitcoin cryptocurrency — and says it will be good for the climate, too. His claim has some experts scratching their heads.
Sim is a crypto proselytizer. Last week, he preached in a video interview for the Coin Stories podcast that he believes Bitcoin "is the greatest invention in human history."
His proposal would order city staff to assess the feasibility of making Vancouver "Bitcoin-friendly," for instance, by accepting payments in Bitcoin and investing some of the municipality's financial reserves into the cryptocurrency.
Sim's motion, which will go to a vote on Wednesday, claims that "Bitcoin mining has shown environmental benefits" that are realized when mines use electricity that would otherwise be wasted. The motion did not cite sources and the mayor's office did not provide any to Canada's National Observer when requested.
Fellow council members aren’t buying it.
"It's ridiculous," said Adriane Carr, one of Vancouver's two Green Party councillors.
The claim is inconsistent with Sim’s recent assertions about electricity in the province. Council just had a "huge debate" over Sim's proposal to reverse a ban on natural gas heating in new buildings, which he justified, in part, by arguing B.C. doesn't have enough electricity to heat new buildings. Integrating an electricity-intensive technology like Bitcoin into the city's financial strategy days later "just does not make any kind of sense," she said.
"It is very irresponsible to say that crypto is absolutely bad for the environment, and it is equally irresponsible to say crypto is absolutely really good for the environment," said Kaveh Madani, director of the United Nations' University Institute for Water, Environment and Health. "Everything should be evaluated on a case by case basis."
Cryptocurrencies like Bitcoin are infamous for having substantial impacts on climate, water and land, primarily linked to the massive amounts of electricity needed to "mine" the currency. This is a process when computers scattered around the world verify transactions made with the currency.
Even if some Bitcoin mines are powered with renewable energy, the technology's distributed and anonymous structure makes it nearly impossible to prove any specific transaction was powered sustainably.
Researchers estimate that each Bitcoin transaction generates as much carbon emissions as driving a gas-powered car around 2,200 km. Between 2020 and 2021 alone, U.N. researchers estimated that if Bitcoin mining were a country, it would rank 27th in the world in energy use. The sector's electricity demand is so high that B.C. has temporarily banned crypto mining until officials can figure out if the province has enough power.
The U.N. study found that nearly half of the energy used to mine Bitcoin was generated from coal, and about a fifth came from natural gas. Hydroelectricity powered about 16 per cent of transactions, while renewables like wind and solar only met a tiny fraction of the demand.
Researchers have also noted that the computers and other equipment used for Bitcoin mining are also energy- and resource-intensive to produce and transport, augmenting the technology's ecological toll.
China was by far the world's biggest Bitcoin-mining nation, and the country accounted for a lot of the coal used to power the transactions. Russia, Kazakhstan, the U.S. and Canada were also major players in the Bitcoin mining industry, the study found.
Madani flips Sim’s formulation on its head. "It is a question of opportunity cost: Would it be possible to channel that electricity toward another use?"
Traditional financial systems aren't without their own ecological impacts, like printing money, he noted. But Bitcoin is one of the most energy-intensive crypto-currencies in circulation — and its benefits don’t necessarily match its costs.
“Those who suffer from the impacts [of crypto mining] are not the main or direct beneficiaries of the currency," he said.
Comments
Thanks for this mind blowing article.
Remind me why/ how Sim was elected?
Holding gov't reserves in fairy dust is an absurd idea. Not to mention that it's sole, real utility is in criminal activity* and, now, one presumes, to allow a city to enable such dealings. Not to mention the ecological and opportunity costs of blockchain, as pointed out in the article.
The late Frank Ney**, former mayor of Nanaimo, wore a pirate's hat to have some fun (particularly relating to the annual bathtub race to Kits Beach); Sim, by contrast, appears inclined to adopt the Jolly Roger as the de facto official flag of Vancouver commerce.
"World class" idiocy.
*https://www.nytimes.com/2024/08/29/opinion/cryptocurrency-election.html
**https://en.m.wikipedia.org/wiki/Frank_Ney
Progressives had to negotiate a rather complex route through several political parties and individual candidates on a long list printed on ledger-sized ballots in the last civic election. Sim's right-of-centre ABC party won in part because it had a full slate and was easy to spot the name.
One City and the Greens did not run full slates, probably because they didn't want to split the non-conservative vote, but then went ahead and did just that. OC had the best candidates and policies in my opinion, and Christine Boyle had not just lots of experience but also expressed independent thought on several issues and projects. I thought she'd make a great mayor. She was elected along with two Green candidates, but lost the rest of her OC slate. She decided to run for the NDP in my riding in the recent BC election. We were happy to help her and her party win, but it was a close call keeping the right wing nut jobs from power.
What lesson can progressive civic parties learn from this? They should start by uniting under one banner, then focus on honing a policy platform that is well grounded and that appeals to everyone, not just vested interests, the loudest NIMBYs, and outlandish ideas. They need to also do the math on a project basis.
Thanks, Alex.
i wonder if prospective candidates have to pay a fee to get their name on the ballot. That's one way to weed out the unserious and reduce the size of the ballot. Likely doesn't need to be much of a cost, could be offset with minimal fundraising, to dissuade the "I've got nothing better to do today" folks.
Assuming Vancouver still elects council on an "at large" basis; ballot design is bound to have an impact on voting behaviour. Perhaps candidates could be grouped by party, with the names within each group jumbled across the ballot forms and parties also jumbled, so every voter doesn't see the identical list of candidates, ordered alphabetically. Maybe have, to pick a number, 6 different ballot forms, all having the same names and parties, but located differently on the page.
I remember way back when Sam Sullivan won the mayorality because two other candidates, one being Sam's more popular and besr qualified opponent, were named Jim Green and James Green respectively. Jim, the genuine progressive candidate with lots of civic experience, had thousands of votes "stolen" by James, someone no one heard of before who just so happened to have his campaign office just down the hall in the same building as Sam. Pure coincidence, of course.
I nearly put my mark next to James by mistake but caught myself just in time. Thousands of others didn't.
Wow. I mean, I always knew Sim was one of those close-to-the-police, in-bed-with-the-developers right wing kind of guys. And when he tried to do that bring-back-the-natural-gas thing with some sneaky tactics and a right hand man who bossed a natural gas company I realized he was deeply unethical and shortsighted.
But I didn't know he was a fucking loony tunes moron. Really, bitcoin?! Either he's a massive idiot or he's just willing to screw over the city in any way for anyone as long as they'll line his pockets. Or both. When is the next Vancouver election? (quick look-up) Gah! Nearly two years still.
No surprise. The nutbar thing goes farther afield too. The only economic policies Poilievre seems to espouse are weilding an axe, building thousands of homes without bothering with the mechanics beyond simple slogans, regurgitating Harper's one horse carraige energy superpower theory from last decade, and yep, bitcoin.
The people don't seem to have enough smarts to elect qualified candidates any more. Is it our diet? How else to explain mass stupidity?