As bitcoin and cryptocurrency get more and more mainstream coverage, the narrative about its energy consumption is becoming stronger.
which also points out that
Critics say electric-car firm Tesla’s decision to invest heavily in Bitcoin undermines its environmental image.
Counter arguments are interesting, and once again make us question what money actually means. This very interesting Twitter thread from Jan 2021 argues in detail that bitcoin is vastly more efficient than other financial systems.
The quick summary of his points:
- ~ The energy required to mine bitcoin is captured in its price, just like anything else “Money, which is the representation of the work required to generate goods and services, can also be viewed as stored energy.”
- ~ Most bitcoin mining is produced with renewable energy (he cites an estimate of ~78%), since the marginal cost of such energy is often the cheapest
- ~ If bitcoin is an ‘energy battery’ like in the first point, then mining is a great way to store renewable energy that cannot immediately be consumed (e.g. extra windy days)
- ~ If anything, since the efficiency improvements in the hardware used to mine bitcoin are slowing, it is inevitable that the price has to rise
- ~ And finally, “Claiming that one usage of energy is more or less wasteful than another” is hypocritical – is watching ‘keeping up with the kardashians’ a waste of energy?