Bitcoin has been getting a lot of bad press about its impact on the
environment. But are these attacks justified? Is Bitcoin really bad for the environment,
or is the mainstream media just picking on bitcoin because it’s an easy target?
Let’s go beneath the headlines and figure out what Bitcoin’s environmental impact really is.
To be clear, it absolutely takes a lot of electricity to keep Bitcoin running. However,
energy use in itself isn’t inherently bad. Lots of amenities that we take for granted - from blow
dryers to air conditioning to the traditional banking sector - all use a lot of energy.
Instead of saying that Bitcoin mining uses energy therefore it’s bad,
here’s what we have to ask: is the benefit we get from Bitcoin worth
the energy we put into the network? That’s where the real debate needs to take place.
Many people do believe that the utility Bitcoin brings to the
world is worth the energy expenditure, but others have argued the opposite.
What many critics fail to explain, however, is that almost half of
all electricity powering the Bitcoin network comes from renewable sources.
This renewable energy makes Bitcoin mining far greener than many other industries,
most of which only get a fraction of their electricity from renewable sources.
Bitcoin mining rigs are also significantly more efficient than they once were. By some estimates,
ASIC miners are 8,000% more efficient than they were 8 years ago. That means
we’re getting the same security with far less electricity use.
Bitcoin mining can also solve a problem that nobody has ever found a solution to before. When
petroleum companies pump oil out of the ground, the process often produces an unwanted byproduct:
natural gas. Until now the only solution was flaring, burning the natural gas into the
atmosphere. However, Bitcoin solves this and many other cases of wasted energy at existing plants.
Bitcoin miners are easily portable and can be set up anywhere in the world,
and it’s much more energy efficient to channel that wasted energy into
mining than it is to waste it. Think of it as a form of energy arbitrage.
Oil companies are deploying portable Bitcoin mining rigs at their drilling
sites. Generators burn the natural gas and use it to power Bitcoin miners,
which is better for the environment than simply flaring the gas.
So if Bitcoin mining is more efficient than it used to be, and a majority of the network’s
energy comes from renewable sources, what’s the downside? Well, one of Bitcoin mining’s
worst environmental impacts is the production of hundreds of thousands of ASIC miners every year.
These ASIC miners are typically only profitable to run for one to three years. After that they become
outdated and unprofitable. While some ASIC miners are recycled, plenty of them end up in a landfill.
At a time when commodity prices are soaring and chip shortages are affecting every major industry,
producing short-lived ASIC miners may not be the best use of our scarce resources.
That’s some food for thought anyways, and of course Bitcoin advocates would say that even if
the current ASICs have a short shelf life, Proof of Work mining is still the only decentralized
and fail-safe way to secure a blockchain. And a secure blockchain provides the world with a truly
decentralized currency that cannot be blocked or censored by any government, corrupt or otherwise.
In fact, the proliferation of decentralized cryptocurrencies will inevitably divert money
away from multinational banks like JP Morgan and Wells Fargo,
that are still responsible for propping up the fossil fuel industry today. This
continues behind an opaque and convoluted system that we’re not meant to see or understand.
Bitcoin’s ledger is open and transparent, and its development open-source,
so we can see exactly what is happening on-chain and how much energy is being used
in mining. The crypto community as a whole is very young and in favor of green energy,
so we’re banking on them to continue reducing Bitcoin’s environmental footprint.
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