Will Bitcoin destroy the planet?

Will Bitcoin destroy the planet?

You can not miss the many articles that compare the energy consumption of the Bitcoin network to that of different countries. And all to insist on the ecological disaster that is Bitcoin. Bitcoin consumes more than all countries in orange! Horror! If Bitcoin consumes as much electricity as Morocco, it’s a disaster, right? No. Consumption by false simplification equates to pollution. We only compare what is comparable. No, Bitcoin’s energy is not wasted. Electricity consumption is not a pollution. First, consuming electricity does not pollute. What pollutes are ways to generate electricity. It’s the same, you say. Well, not at all! If it were the same, we would fight against electric cars and encourage petrol cars (which are more efficient because energy is produced directly with better overall performance). You are certainly convinced that electric cars, which consume electricity, are an asset for the preservation of the environment. However, depending on the conditions, a Tesla would consume between 5,000 and 10,000 kWh for 20/30,000 km per year. This means that if half of the drivers in a small country like Belgium bought a Tesla, that half would consume more than all Bitcoin consumption! And it’s only half a small country! Can you imagine the disaster if there were more Tesla? But for comparison, why is not electricity consumption necessarily polluting? And why are electric cars interesting on the ecological level? First because sometimes the electricity is there and not used. This is the case of solar panels, hydroelectric dams or nuclear power plants that produce electricity, whatever happens. We can not do ON / OFF and electricity is hard to transport at the moment. According to a study by Bitmex, much of the electricity used today in Bitcoin is actually an underutilized hydropower infrastructure, as it was originally intended for aluminum production in China, a production that fell sharply as a result of lower demand for this material. I repeat: Bitcoin has benefited from a large amount of unused electricity and is therefore very cheap, ecologically and economically. In some cases, reducing energy consumption can even be problematic. Secondly, if we focus solely on CO2 pollution (which is far from being the only pollution but the most media presently), it is simply impossible to make an equivalence: as much electricity produced is equivalent to CO2 produced. Indeed, the CO2 produced depends entirely on the means of production used. Worse, every CO2 atom is not equivalent!

Today, Bitcoin is above all a system of exchange of values. It is therefore comparable to currencies, banking and gold. Surprise, Bitcoin consumes little more than the production of coins and banknotes! It should be noted, however, that coins and notes represent only 8% of the total money supply and more precisely 6.2% for the euro area. It also consumes nearly 8 times less than gold mining or 50 times less than aluminum production. In addition to energy consumption, gold mining is extremely polluting (especially for heavy metals such as mercury). Gold pollution seems all the more useless since we know that 17% of all gold mined in the history of humanity is stored in the coffers of states and does not move. As Warren Buffet said, gold is extracted from a hole in Africa to be placed in a guarded hole day and night in another country. If one adds to this gold bought by private individuals (to keep in a chest or to hide under a mattress) or used in jewels (whose utility is therefore only aesthetic), there remains only 10% of the annual gold production used in the industry! If Bitcoin replaced, even partially, gold stored in chests, it would be a marvel of ecology, comparable to replacing all gasoline cars in the world with electric cars and if we were to compare Bitcoin to the banking system, with its thousands of air-conditioned buildings, its millions of employees came to work by car (or private jet), Bitcoin would seem more ecological and simply miraculous. We are only at the beginning! Bitcoin has the potential to become a true decentralized platform that could completely replace the Web as we know it and change our social and political interactions: votes, communications, exchanges without the possibility of control of a centralized authority. Have you ever wondered what is the energy consumption of a Youtube mainly used to broadcast ads between two funny videos (and therefore to consume you and pollute more)? And the consumption of Google data centers in 2015 was higher than that of Bitcoin in 2017! This does not include the consumption of intermediate routers, computers, phones, tablets, or any other Google office other than the data center! Given these numbers, what do you think is acceptable consumption for a decentralized global platform that can replace hyper-polluting extraction of gold, banks, centralized Internet and even states? Or simply protect some of our fundamental freedoms? Before criticizing the consumption of Bitcoin, it is therefore necessary to quantify how much we estimate a “normal” consumption for such a system.

Leave a Reply