Bitcoin has always had bad press due to its environmental impact. Bitcoin mining, which requires an astronomical amount of energy, is regularly singled out. It is even said that the entire Bitcoin network consumes as much energy as an entire country like Argentina. In other words, cryptos are seen as evil destroyers of the planet. But is this really the case?
Bitcoin: an ecological aberration?
Bitcoin, this much-talked-about cryptocurrency, is often singled out for its alleged environmental impact. The mainstream media loves to relay reports that denounce the energy consumption of bitcoin, but most of them are flawed, incomplete, or even completely wrong.
Although bitcoin requires energy to operate, it should be clarified that miners mainly use this energy to secure the network rather than to process transactions.
In addition, it is difficult to accurately map all mining sites currently in operation and identify what type of energy they consume. It is therefore advisable not to trust blindly to the figures put forward by certain reports, which often show a total incomprehension of the subject.
As for the electronic waste generated by the mining industry, it often seems exaggerated in the media. In reality, the impact of bitcoin on the environment is much more complex than it seems. Careful consideration should therefore be given to all the factors involved before jumping to conclusions.
Energy: challenges and responsibilities for a sustainable future
Energy is vital for our civilization and its development. Since the dawn of mankind, the collection and use of energy have been key drivers of our progress.
Today, energy is at the heart of almost all economic activities, and without it, our society would collapse in just a few days.
The urgency would rather be to answer the question of how to use energy in a responsible and sustainable way.
In the long term, it is crucial to responsibly and sustainably develop the energy sources present around us. Innovation and research will be essential to achieve this.
However, in the immediate future, given the energy constraints, we have to choose the areas to focus on. That is to say, to prioritize our energy needs. So, does bitcoin consume energy unnecessarily?
This question brings us back to the usefulness of bitcoin. In fact, bitcoin has a lot of positives. The inhabitants of Salvador, Nigeria or even Lebanon are better placed to answer the question of the usefulness of bitcoin.
It is important to remember that bitcoin has two main objectives: to be an independent digital currency and to offer a decentralized and uncensorable payment network. Currently, it perfectly achieves these objectives. It is therefore up to each individual to decide whether this technology is useful or not.
Bitcoin and the carbon footprint!
When analyzing the energy consumption of Bitcoin, it is crucial to understand if this energy is used optimally.
Estimates reveal a consumption of 100 to 200 terawatt hours for the Bitcoin network, or just over 0.1% of global energy consumption. However, it would be imprudent to conclude directly on the quantity of CO2 emitted based on these figures.
Assessing bitcoin’s usefulness and legitimacy requires comparing it to the industries it tries to compete with, including banking and the precious metals industry. And the results are clear: these sectors have far greater environmental impacts than Satoshi Nakamoto’s invention.
In 2021, the annual energy consumption of the Bitcoin network was around 113.89 terawatt hours (TWh), while the global banking system consumed about 263.72 TWh. Gold, on the other hand, has been the quintessential store of value for thousands of years, as it is rare and difficult to extract.
Although Bitcoin wanted to replicate this model, it is not perfect, but it is much better than the competition. To put Bitcoin’s energy consumption into perspective, it is therefore important to compare it to what it is trying to accomplish and the sectors it is trying to compete with.
Studies on this subject show that the banking industry and gold have much greater environmental impacts than bitcoin.
Bitcoin becomes more profitable by switching to renewable energy
According to Bitcoin Mining Councilthe bitcoin mining industry has made significant progress in its transition to cleaner energy.
Indeed, the share of electricity from sustainable sources in bitcoin mining increased to 59.4% during the third quarter of 2021 to 2022. This makes it one of the most advanced industries in the ecological transition.
This positive trend should continue with the emergence of new sources of renewable energy in the world. However, to maintain their viability, miners are looking to reduce their costs, especially those related to electricity, which represent a significant part of their expenses. Miners can move their activity almost anywhere to take advantage of favorable electricity rates.
The number of miners migrating to places where energy is cheaper continues to rise. This trend had taken place when the Chinese authorities cracked down on mining companies, forcing many miners to seek refuge in Kazakhstan or North America.
Miners also use intermittent green electricity to optimize their profitability and competitiveness.
In sum, the bitcoin mining industry has a natural interest in turning to renewable energies to ensure its viability, while the use of fossil fuels could endanger the future of miners. Miners are playing a crucial role in the global energy transition to a greener and more sustainable economy.
In conclusion
The media often tends to amplify Bitcoin’s environmental impact without considering the amount of energy needed to secure the network. However, in comparison to banking and the precious metals industry, Bitcoin has a significantly lower carbon footprint.
However, it is crucial to prioritize our energy needs and develop sustainable energy sources to harness energy responsibly and sustainably. Bitcoin miners have a natural interest in turning to renewable energies to optimize their profitability and gain market share.
Finally, the advantages offered by this technology should not be overlooked. The media and governments that demonize the mining industry should take the time to dig in and understand the subject. The blockchain sector can represent a major opportunity to fight against climate change that threatens our planet. After all, Bitcoin and cryptos are one of the greenest industries on the planet.
Receive a digest of news in the world of cryptocurrencies by subscribing to our new service of daily and weekly so you don’t miss any of the essential Tremplin.io!
