Cryptocurrencies like Bitcoin
are terrible for the environment.
It's an extremely inefficient way
of conducting transactions.
It's a way to both hide dirty money
and destroy the environment at the same time.
The environmental attacks on Bitcoin
are best understood as a strategy by economic media
and political elites to undermine
a form of money they can't control.
Critics distort the basic facts
about what's known as Bitcoin mining,
the process through which a global network of computers
maintain the Bitcoin network through computation.
Though energy-intensive,
this process is what makes Bitcoin
a truly decentralized monetary system.
The amount of energy that's consumed
in processing those transactions is staggering.
A single Bitcoin transaction,
that's one purchase, or one sale,
or one transfer uses the same amount of electricity
as the typical US household uses in more than a month.
I think the estimate is 53 days.
Wow. Yeah.
They devise this per transaction energy cost figure.
And then they extrapolate Bitcoin's transactional load
to hundreds of billions per year.
Nic Carter is a partner
at Castle Island Ventures.
He's written a series of influential articles
about Bitcoin and energy.
On the basis of this
somewhat illusory per transaction energy cost figure,
they assume that Bitcoin will grow rapaciously
in its energy footprint.
In fact, as the Bitcoin network grows
to support additional transactions,
it doesn't require additional energy.
Just as the federal reserve building's electricity bill
doesn't increase with every ATM withdrawal,
the electricity consumed by mining
isn't used to power individual transactions.
It's used to secure and administer
the foundation layer of Bitcoin's monetary network,
which can then be extended almost infinitely.
Bitcoin transactions and Bitcoin's energy use
are not really correlated.
An additional marginal transaction doesn't really
add much energy outlay to the Bitcoin system.
The energy use by Bitcoin miners
has increased significantly and it will continue to grow,
but the media's claims are outlandish.
In 2017,
Newsweek boldly predicted that Bitcoin was on track
to consume all of the world's energy by 2020.
One of the most commonly cited figures
comes from a 2018 two-page analysis,
published in Nature Climate Change
and trumpeted by The New York Times and other outlets.
Bitcoin's growth could single-handedly
push global temperatures
above the tipping point of two degrees.
Effectively, it makes some very questionable assumptions
about Bitcoin to drive this extrapolation
of Bitcoin's future carbon footprint.
I finds this cartoonish figure that Bitcoin could increase
the world's temperature by two plus degrees,
which is completely inconsistent with the way Bitcoin works.
Nature Climate Change
went on to publish three rebuttals,
pointing out the implausible assumptions used
to generate its figure.
Including the same fallacy of calculating
an energy cost per Bitcoin transaction.
And then assuming a linear increase as the network grows.
So how much energy does Bitcoin mining actually consume?
The Cambridge Center for Alternative Finance
estimates Bitcoin uses just over
a hundred terawatt-hours per year,
which is less than gold mining,
and many other residential, and industrial activities.
Critics routinely invoke the idea that Bitcoin
uses more electricity than whole countries
to generate attention-grabbing headlines,
but that's also true of many industries.
And if Bitcoin were a country,
it would rank 32nd out of 59 tracked
by the Cambridge Center.
And for what it's worth,
Bitcoin's market cap is over a trillion dollars,
far more than the GDP of many of the countries
to which it's compared.
Critics also tend to ignore that miners are incentivized
to use energy that would otherwise go to waste.
That's because electricity
is hard to transport over long distances,
while Bitcoin mining can happen anywhere
that there's internet access.
So miners gravitate toward energy sources
with excess capacity.
They will go to the Amazon, they will go to the Congo,
they'd Siberia, they'd go Antarctica,
or in the middle of the ocean;
they'll go wherever the cheapest energy is.
Alex Gladstein is chief strategy officer
at the Human Rights Foundation.
He points out that Bitcoin miners lose money
in competitive electricity markets
because the cost of the power
they consume exceeds their earnings.
Bitcoin miners can only pay two to five cents
per kilowatt for the energy.
Industrial nations consumers pay 10, 15 cents.
And in developing countries, they pay 20 to 40 cents.
What I'm concluding here with is that Bitcoin miners
need energy that nobody else wants.
In the Western United States,
mobile Bitcoin miners are already running on electricity
derived from unused natural gas from oil wells
that can't be captured
because there are no pipelines to carry it.
argues that Bitcoin can be used
as a spur to develop more renewable energy
in underdeveloped countries, remote locations,
and even existing landfills.
A recent industry survey put Bitcoin mining's
sustainable energy use at around 56%,
a figure that will likely grow.
Bitcoin miners are like a sponge.
Any excess energy bubbling to the point
where it becomes cheap enough for them,
they will soak it up.
There are computers all over the world right now
spitting out random numbers around the clock
in a competition to try to solve a useless puzzle.
The claim that Bitcoin mining is useless
is the essence of the government's case against Bitcoin
because it's this component
that directly challenges state power.
The work being carried out
by this global computer network
is what allows Bitcoin to be controlled
by mathematical rules instead of human actors
vulnerable to government or corporate control.
Bitcoin is a vote of no confidence
in the monetary and financial system that exists today.
It's a pretty exclusionary system
where we are extremely beholden to the opinions
of a half dozen individuals who all think the same way.
Would you go so far as to say
it's almost like a generational movement
against the status quo,
in favor of a non-inflationary, part currency?
Absolutely. And it's not just non-inflationary.
It is a non-discretionary monetary rule.
There's no central banker that can come in
and alter the rules
and privilege one certain set of society
at the expense of another.
That is the core of the movement here.