There is no longer any doubt that bitcoin is an asset for the energy transition. When lies take the elevator…
Bitcoin and Critics
Bitcoin consumes a lot of electricity. About 150 terawatt hours per year. This is the equivalent of the consumption of countries like Poland or Malaysia. And as with any industry, a significant portion of electrons are generated by burning fossil fuels.
It was enough to demonize this “useless and redundant monetary system” in the name of the fight against global warming. However, this story does not hold water when we take the time to sort the chaff from the wheat.
First, let’s defuse the argument by pointing out that electricity consumption represents only a small part of any country’s total energy consumption.
Globally, electricity consumption represents 25,500 TWh, compared to 175,000 TWh in total. That is to say only 14%.
It must then be said that the media continue to highlight the work of Alex de Vrie (@Digiconomist) which is based horribly on bad methodologies and outdated data.
His crude extrapolations are due to the fact that it is very difficult to collect reliable data for an industry scattered across the four corners of the world. Unless you contact minors directly.
This is what analyst Daniel Batten does, who has been doing exceptional work for several years to dispel fake news. Here is his latest interview on the subject for Anglophiles:
Furthermore, it is clear that the mainstream press is quick to act as if bitcoin serves no useful purpose for society. Nothing could be further from the truth. Bitcoin is an absolute store of value as well as a stateless and uncensorable payment network. It is an invaluable good.
Facts
Bitcoin miners are accused of mainly consuming fossil fuels. This is incorrect.
The most serious data shows that 70% of miners are connected directly to national electricity networks. Which, taking into account their geographical distribution, gives electricity that is 45% green and 55% carbon.
The remaining 30% draw their electricity from off-grid, where it would often be wasted (run-of-river hydraulics). This electricity is 75% green and 25% carbon.
In other words, the Bitcoin network consumes 54.5% non-carbon electricity overall:
The lower the cost of Kwh, the more miners increase their margins. It is naturally in their interest to find inexpensive sources of energy.
So more and more miners are turning to methane (CH4) which would otherwise be flared because they cannot transport it from oil extraction sites to civilization. Burning it in electricity generators allows complete combustion unlike flares which allow significant quantities of CH4 to escape into the atmosphere due to the wind.
Some even settle in landfills where 100% of methane fumes end up in the atmosphere. However, methane is the second greenhouse gas emitted by human activities after CO2. It is about 30 times warmer than CO2.
Even 84 times more over a shorter period of 20 years. Which makes us say Daniel Batten that miners already offset 7.5% of their industry’s emissions.
This is the case of the miner Vespene. Or even from Marathon – the largest miner in the world – which recently published a very interesting report on this subject.
Six generators mine bitcoins using methane that would otherwise be flared from the oil well. »
Bitcoin, the crutch of energy companies
In the report Bitcoin and the Energy Transitionresearchers from theInstitute of Risk Management argue that the convergence of the Bitcoin industry and energy companies is the key to a sustainable, energy-abundant future.
A report of KPMG concludes that miners contribute to the stabilization of electricity networks and the reduction of greenhouse gas emissions.
That of Cornell University recognizes that the bitcoin industry is a welcome financial windfall for the energy transition. We can read there:
“We must highlight the increase in energy efficiency of the bitcoin industry. As is its shift towards renewable energies. This highlights its ability to contribute to the energy transition. In particular thanks to the removal of miners during peaks in electricity demand and the mitigation of methane emissions. »
For Ben Gagnon, COO at Bitfarms, “mining bitcoins is the only economical solution to reduce energy waste and CO2 emissions that does not need subsidies.”
Bitcoin miners are indeed ideal for making profitable renewable energies whose intermittent production peaks rarely coincide with peaks in demand.
The fact that miners can set up absolutely anywhere offers them the possibility of making profitable use of large quantities of energy that would otherwise be wasted. All you need is an internet connection to the Starlink network. No other industry has this advantage.
Let’s end by saying that it is likely that greenhouse gas emissions linked to Bitcoin have already passed their peak.
Certainly, the appreciation of bitcoin always attracts more miners. But this influx is compensated by the halving every four years. Not to mention the impressive increase in the efficiency of ASICs. Or even by the need for inexpensive electricity which happens to come from surplus renewable energy.
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