“Bitcoiners may not like it. But ‘greener’ bitcoin may be the price of admission to mainstream markets. This isn’t 2015 anymore.”
Is the cryptocurrency going to eat up all of our energy?
Others would say it’s not really a problem:
Bitcoin mining uses tiny, insignificant amounts of energy
It’s often suggested that Bitcoin mining uses huge amounts of energy and causes massive carbon emissions. Recent headlines tell us that “Bitcoin uses more energy than Argentina” (BBC) and that Bitcoin’s “jawdropping” consumption “rivals London’s”.
But what are the facts? What’s the context?
It’s not too difficult to generate an estimate of how much energy Bitcoin mining consumes, because the nature of the blockchain means that anyone can see new blocks being created. The amount of compute power required to achieve the observed progress can then be estimated, and by taking a guess at the efficiency of the equipment miners are using, economists and modellers can generate a number for the miners’ total electricity consumption, which will have some relation to reality.
Various people and organisations do this, such as the University of Cambridge Judge Business School and economist Alex De Vries. As this article is written, De Vries puts the miners’ consumption at an estimated 79.6 terawatt-hours per year (TWh/yr). The Cambridge modellers say it’s more like 128 TWh/yr, illustrating that this is not an exact science…
Here’s a very reasonable observation from today from the CoinDesk website:
‘Green’ Bitcoin Is the Price of Mass Adoption
Bitcoiners may want to dismiss the energy/environment debate, but it’s not going away as more corporates look to make an allocation.
Meanwhile, the “bitcoin energy debate” has been one of crypto’s fiercest (which is saying something).
On one side are people who complain (somewhat erroneously) that bitcoin’s energy consumption is the size of a small country and who can’t understand why a climate-threatened world needs energy-intensive peer-to-peer money.
On the other, people say that 1) bitcoin’s mining is getting cleaner, 2) that fiat uses plenty of energy too, and 3) that, why don’t we ever talk about the energy consumption of, say, America’s wars and Christmas lights?
To me, O’Leary’s comments point to two reckonings.
One, as much as Bitcoiners want to dismiss the energy/environment debate, it’s not going away. There are simply too many people frightened about climate change to allow BTC a free pass on these questions. The community needs to account for its footprint the same way every industry (more or less) has to these days. That’s just modern business.
And two, well, the energy debate actually doesn’t matter. It’s not important if you think the critics are wrong or hypocritical. It only matters that the people who matter on Wall Street take this seriously.
At bottom, this is a question less about the environment and more about institutionalization. Large companies are bound by sustainability and ESG committees. They have stakeholders and rules and processes to follow. And, these days, environmental impact is a material liability. They need to prove they’re clean.
Bitcoiners may not like it. But “greener” bitcoin may be the price of admission to mainstream markets. This isn’t 2015 anymore.