Coordinated FUD debunking against bitcoin (BTC) mining

The press is making a big fuss over the latest adulterated study depicting bitcoin as an energy mismanagement. Debunking.

“The social and environmental cost of bitcoin comparable to beef”

That’s what the headline Figaro and all of the major press, taking up in chorus a dispatch from the Afp. The France-Presse agency based itself on a study appeared in Nature, throwing out dubious figures.

By the way, do newspapers sell so little paper that there is no one left to do real investigative work?

Are they condemned to be served soup by three press agencies that guarantee globalized propaganda (Associated Press, Agence France-Presse and Reuters)?

Anyway, what about this paper titled: “Bitcoin is more like digital crude (oil) than digital gold.”

The heart of the study is based on the SCC metric (Social Cost of Carbon). The social cost of carbon is defined as the future monetary damages associated with the impact of global warming on human health and the environment.

In other words, the calculation of the SCC derives from an estimate of the negative impacts that our CO2 emissions will have. For example, the cost of increasing droughts. Or the cost of caring for cancers triggered by too high a concentration of CO2 in cities.

The paper is based on a cost varying between 50 and 150 dollars per tonne of carbon dioxide emitted. A figure on which there is “no consensus”, we can read.

The authors compared the carbon emissions cost of the Bitcoin network with its market capitalization. The objective being to see if it costs more than what it brings in. It turns out that Bitcoin has never cost more than it brought in. Phew…

But what does it matter since it is above all the comparison with other raw materials such as meat that challenges. It is therefore a question of asking ourselves if the figures used in the calculations are faithful to reality. We will see that the authors are far from the mark.

Here is the graph behind the FUD:

Climate Cost of Bitcoin vs. Market Cap
Source : Nature (Bitcoin Climate Cost vs. Market Cap)

It appears that taking into account an average cost of 100 dollars per ton of CO2, the climate cost of bitcoin represented 35% of its market capitalization between 2016 and 2020. And 25% for the year 2020 alone.

Disguised numbers…

A first approximation is obvious: the calculation of electricity consumption from the hashrate of the bitcoin network.

The study assumes that minors do not use that machinery of mining of S15 models.

Problem, these machines represent today only 10% of the hashrate. And this was already the case in 2021, the last year taken into account in the paper.

Hashrate by type of mining machine
Hashrate produced by machine type mining of bitcoins (S19 in green, S15 in blue)

The vast majority of machines are now of the type S19twice as efficient as the model S15. In other words, the figures put forward by the authors can already be halved. It begins well.

Moreover, if the authors go so far as to clearly specify that they do not count the CO2 emissions linked to the construction of miningthey do not specify which SCC (climate damage) they use for the comparison with the other raw materials.

All we have is: “Climate damage for other commodities shown is calculated using life cycle estimates from the literature and US government agencies.”

In other words, if the SCCs used are not $100 per ton, we are comparing oranges with bananas. But let’s admit that there is no eel under rock there (Hum..).

Another major approximation concerns the energy mix of the bitcoin network, which would be 61.5% carbon!

It is actually the reverse. According to the reference study on the subject (Bitcoin Mining Council), the Bitcoin network consumes 59.5% renewable energy instead. And it was already almost the case in 2021.

Charitable, the authors did the math with a 63% share of renewable energy. The climate cost for the period 2016-2020 then falls to 23%.

So that by putting everything end to end, we obtain a climate cost of bitcoin representing roughly 8% for 2021. Against 33% for beef. CQFD.

And again, all of this ignores the fact that Bitcoin is on its way to becoming “carbon negative” by extinguishing the methane flares. Not to mention the fact that it offers a floor price to producers of renewable electricity.

Do not miss our two recent articles on the subject:

  • Arcane brushes off attacks on bitcoin’s energy consumption
  • Anti-Mining climate rhetoric crumbles

Anyone with a shred of intellectual honesty can’t take what the mainstream press is saying at face value. Bitcoin is an asset for energy companies who are implementing a costly energy transition.

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