Bitcoin an environmental danger?

Bitcoin has always had a bad reputation due to its environmental impact. Bitcoin mining, which requires an astronomical amount of energy, is regularly criticized. It is even said that the entire Bitcoin network consumes as much energy as a whole country like Argentina. In other words, cryptocurrencies are perceived as wicked destroyers of the planet. But is this really the case?

Bitcoin: an ecological aberration?

Bitcoin, the cryptocurrency that makes so much noise, is often criticized for its alleged environmental impact. Mainstream media love to report on reports denouncing Bitcoin’s energy consumption, but most of them are shaky, incomplete, or even totally wrong.

Although Bitcoin requires energy to function, it should be noted that miners mainly use this energy to secure the network rather than to process transactions.

Moreover, it is difficult to accurately map all the mining sites currently in operation and identify what type of energy they consume. It is therefore not advisable to blindly rely on the figures presented in some reports, which typically demonstrate a total lack of understanding of the subject.

As for the electronic waste generated by the mining industry, it frequently seems exaggerated in the media. In reality, the impact of Bitcoin on the environment is much more complex than it seems. It is therefore necessary to carefully analyze all the factors at play before drawing hasty conclusions.

Energy: challenges and responsibilities for a sustainable future

Energy is vital to our civilization and its development. Since the dawn of humanity, 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 be rather to answer the question of how to exploit energy in a responsible and sustainable way.

In the long term, it is crucial to develop the sources of energy present around us in a responsible and sustainable way. Innovation and research will be essential to achieve this.

However, in the short term, given the energy constraints, we must choose the areas to prioritize. That is to say, prioritize our energy needs. So, does Bitcoin unnecessarily consume energy?

This question brings us back to the usefulness of Bitcoin. In fact, Bitcoin has many positive points. The inhabitants of El Salvador, Nigeria, or 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 uncensored 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 Bitcoin’s energy consumption, it is crucial to understand if this energy is being used optimally.

Estimates reveal a consumption of 100 to 200 terawatt-hours for the Bitcoin network. Which is a little over 0.1% of the world’s energy consumption. However, it would be imprudent to directly conclude on the amount of CO2 emitted based on these figures.

Assessing the usefulness and legitimacy of Bitcoin requires comparing it to the sectors it is trying to compete with, notably banks and the precious metals industry. And the results are clear: these sectors have much greater environmental impacts than Satoshi Nakamoto’s invention.

In 2021, the annual energy consumption of the Bitcoin network was around 113.89 TWh, while the global banking system consumed around 263.72 TWh. Gold, on the other hand, has been the ultimate store of value for thousands of years, as it is rare and difficult to extract.

While Bitcoin has sought to replicate this model, it is not perfect, but it is far better than the competition. So to put Bitcoin’s energy consumption in perspective, it’s important to compare it to what it’s trying to accomplish and the industries it’s trying to compete with.

Studies on the topic show that the banking and gold industries have much greater environmental impacts than Bitcoin.

Bitcoin becomes more profitable by using renewable energy

According to the Bitcoin Mining Council, the Bitcoin mining industry has made significant progress in transitioning to cleaner energy.

In fact, the share of electricity from sustainable sources in Bitcoin mining increased to 59.4% during the third quarter of 2021 to 2022, making it one of the most advanced industries in ecological transition.

This positive trend is expected to continue with the emergence of new sources of renewable energy around the world. However, to maintain their viability, miners are looking to reduce their costs, especially those related to electricity, which represent a significant portion of their expenses. Miners can move their operations almost anywhere to take advantage of advantageous electricity rates.

The number of miners migrating to places where energy is cheaper continues to increase. This trend occurred when 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 short, the Bitcoin mining industry has a natural interest in turning to renewable energy to ensure its viability, while the use of fossil fuels could jeopardize the future of miners. Miners are playing a crucial role in the global energy transition towards a greener and more sustainable economy.

In conclusion

The media often tends to amplify the environmental impact of Bitcoin without considering the energy needed to secure the network. However, compared to the banking and precious metals industries, Bitcoin has a significantly lower carbon footprint.

It is crucial to prioritize our energy needs and develop sustainable energy sources to use energy responsibly and sustainably. Bitcoin miners have a natural interest in turning to renewable energy to optimize their profitability and gain market share.

Finally, it is important not to overlook the benefits offered by this technology. Media and governments that demonize the mining industry should take the time to dig deeper and understand the subject. The blockchain sector can represent a major opportunity to fight climate change that threatens our planet. After all, Bitcoin and cryptocurrencies are one of the greenest industries on the planet.