Recent Energy Studies Vindicate Bitcoin
There is a common belief that Bitcoin is incredibly inefficient when it comes to power consumption, but that idea is now being challenged by some recent studies.
Climate change activists have been quick to call Bitcoin an abomination in terms of its energy consumption, but a recent study out of the University of Denmark is showing that Bitcoin’s energy consumption isn’t nearly as high as was earlier projected.
It seems like the previous estimates that said miners caused 63 megatonnes of CO2 emissions annually was based upon a uniform CO2 emission rate. Instead, the new number is projected to be much lower, at 17.29 megatonnes (2018 figure). This is still a hefty amount but shows that many numbers used in arguments are based on guesswork instead of facts.
The Debate Around Bitcoin
It has been said that Bitcoin is the sole reason that some countries won’t hit the Paris agreement, but that is now being shown to be untrue. Although there is high energy consumption, it is often green energy being used. This has been the source of debate between energy specialists, as Bitcoin has proved to be a dividing factor for many of them. In fact, a June report showed that 74.1% of Bitcoin mining is powered by renewables, which is a commendably high number.
One other interesting fact is that mining hardware doesn’t actually cause that much carbon emissions. You would think with new mining rig models being released on a semi-annual basis, there would be tons of production and disposal emissions, but it turns out those only amount to 1% of the total emissions.
Comparing Bitcoin to Banks
A lot of Bitcoin miners have been locating their businesses in areas where there is extremely cheap power, like mainland China or certain areas of Canada. This is seen as a bad or perhaps more opportunistic thing, but it actually could be good for the electricity market. Big banks use a ton of power as well, yet many are located in downtown hubs where power is much more expensive and put more of a demand on the grid. If they were able to move their energy needs to places with cheaper power, the world would actually benefit.
All of this assumes that Bitcoin miners are an essential utility, which not enough of the world has come to accept yet, but the idea is that if you compare the energy needs, it isn’t really all that much worse than banks.