Prominent Figures on Bitcoin and Energy Consumption
Recently there has been a lot of talk about the massive amount of energy being consumed globally due to Bitcoin. President Biden's top economic advisor stated that Bitcoin is "an extremely inefficient way to conduct transactions" and "the amount of energy consumed in processing those transactions is staggering" (Source 1). Microsoft co-founder Bill Gates has also criticized Bitcoin as he states "Bitcoin uses more electricity per transaction than any other method known to mankind" (Source 2). As Inner Mongolia is pressured (by Beijing's energy consumption and energy intensity review) to meet its energy conservation goals, all new and existing bitcoin mining projects are expected to be halted (Source 3).
The amount of criticism of Bitcoin may have you worried, especially if you are a person who has invested a lot in bitcoin or actively mines it. Questions such as "will Bitcoin mining be forcibly limited?" or "will the criticism of bitcoin cause fluctuations in the market?" may arise. You might even relate with Bill Gates, that Bitcoin is not good for climate change and question the sustainability of Bitcoin.
A Look at the Data
With all the controversy around Bitcoin and energy consumption, one may want to know the real energy cost of Bitcoin. It is not possible to provide an exact answer as to how much energy Bitcoin-related activities consume, but bitcoin does consume a "similar amount of power as the Netherlands" (Source 1). Bitcoin has also been compared as having more electricity consumption than other countries such as Switzerland and the United Arab Emirates.
With many sources of energy consumption comes a carbon footprint. Those having favor for Bitcoin have been quick to point out that Bitcoin does not produce as many emissions as other technologies. Cryptocurrency analytics firm Arcane research finds that Bitcoin only contributes to 2.3% of digital tech emissions (Source 4).
When compared to the entire industry of digital tech, Bitcoin does not have too much of a carbon footprint. People on the positive end of the Bitcoin debate express concerns that Bitcoin is criticized more heavily than other wasteful applications.
The Future of Bitcoin
Right now the Bitcoin energy debate hinges on three main points. The first point being if it is worth spending energy on a non-state currency. The second being that Bitcoin can be a sound currency for those living in places with less fortunate banking or monetary systems. Debaters have also mentioned that Bitcoin can help free oppressed people from perceived tyrannical monetary practices (things such as freezing bank funds, seizing money... etc). The final and third point focuses on current and the proposed future energy costs of Bitcoin-related activities (Source 6). This argumentative point can make those who are defensive of Bitcoin point at other industries that use a lot of energy (game consoles, Christmas lights, Data Centers... etc). Some have even stated that arguments against Bitcoin just exist to start trouble or as an attempt to completely eliminate Bitcoin.
Energy consumption that comes from the issuance of new Bitcoins will decline over time. Only 21 million Bitcoins can be issued and the process is close to 90% done. Do not let Bitcoin's carbon footprint deceive you, as over 75% of Cryptocurrency Miners use renewable energy sources (solar, wind, geothermal, hydropower... etc) (Source 7). Researchers Yo-Der Song and Tomasto Aste state "Despite a 10-billion-fold increase in hashing activity and a 10-million-fold increase in total energy consumption, we find the cost relative to the volume of transactions has not increased nor decreased since 2010." (Source 8). Considering this, Bitcoin transactions may be less inefficient than some critics think.
Final Thoughts and Remarks
Whatever your thoughts are on Bitcoin, if the current carbon footprint and energy consumption are acceptable to you or if they are unacceptable, then you should consider that the criticism of Bitcoin will lead to the influence of Bitcoin's price. Hopefully, more miners will use clean energy to alleviate environmental concerns. Perhaps those who defend Bitcoin will come out on the winning side of the argument. Decreased coin issuance may correct the Bitcoin energy issue altogether. Please leave a tip if you found this article helpful and be sure to check below for sources. I am also on Publish0x and you can earn crypto for reading/writing here, https://www.publish0x.com?a=zPdy8VLzbQ
Source 1 - https://finance.yahoo.com/news/bitcoin-energy-bigger-most-countries-002222463.html
Source 2 - https://www.popularmechanics.com/science/a35717144/bill-gates-bitcoin-energy-climate/
Source 4 - https://finance.yahoo.com/news/bitcoin-uses-more-electricity-method-104051222.html
Source 5 - https://www.cnn.com/2021/02/23/investing/bitcoin-prices-fall-yellen-gates/index.html
Source 6 - https://www.coindesk.com/frustrating-maddening-all-consuming-bitcoin-energy-debate
Source 8 - https://www.frontiersin.org/articles/10.3389/fbloc.2020.565497/full
This is the second time that I read about the energy consumption brought about by Bitcoin Mining. I was not actually thinking about this thing, but this is indeed happening.