NRDC
“In comparison with more traditional online banking, a single bitcoin has the same carbon footprint as 330,000 credit card transactions. Given the world’s exceedingly tight timeline to reach net-zero emissions and avoid a climate catastrophe, the [Bitcoin] boom poses a big problem.”
Response:
Again, more unfounded, uncontextualized fear-mongering coupled with an invalid comparison of Bitcoin, a network for trustless final settlement and peer-to-peer value exchange, with credit transactions facilitated by intermediaries atop the fiat system. According to the Bitcoin Mining Council, an industry organization accounting for more than half of the global hash rate, the Bitcoin network accounts for only 0.15% of global energy use and .086% of global CO2 emissions, an indisputably insignificant energy demand profile. The fact is, other monetary goods are incredibly carbon intensive in comparison. Real estate, which carries a monetary premium far above its use value, accounts for 40% of global emissions and drives significant social externalities including exacerbating the global cost of living crisis and problems.
While it is true that Bitcoin does use energy, and that this energy load carries resultant emissions, a closer look at the kind and quality of energy being used is warranted. Globally, the Bitcoin network uses 59.5% renewable energy, a higher proportion than any other industrial process, let alone a higher proportion than any country in the world. Given these facts, short-sighted, alarmist concern-trolling by the NRDC serves no practical purpose in the discourse around climate change given Bitcoin has a decidedly undersized climate impact relative to its already inconsequential energy demands. The “boom” in Bitcoin mining poses less of a so-called climate “problem” than virtually any industry. Contrary to the NRDC’s framework, Bitcoin is helping to drive the acceleration of renewable energy solutions.
The Guardian
“Texas has a problem too. After China’s crackdown on bitcoin mining , many miners moved to Texas, where the electrical grid is deregulated. Environmental groups say the extra pressure on Texas’s grid could cause more blackouts of the sort that happened in February, when households were plunged into dark and freezing circumstances.”
Response:
As noted by The Guardian, Texas has had difficulties with its energy grid stemming from the inability to deliver enough energy when demand is high and incorrectly suggests that Bitcoin miners could cause future blackouts, while the polar opposite is closer to the truth.
Many of the problems facing the Texas grid are due to the high proportion of renewable energy it has integrated, often resulting in a large mismatch between when renewable energy is generated (when the wind is blowing or the sun is shining) and when demand for that energy materializes. This problem of intermittency has led to highly volatile energy prices–a problem for energy producers and consumers alike. Surprisingly, proof-of-work presents an opportunity to mitigate both of these undesirable outcomes and can help stabilize energy markets in times of critical need.
Bitcoin miners are highly mobile and continually seek out the cheapest energy inputs irrespective of geography. This type of uniquely geographically flexible and monetizable energy demand offers a critical avenue for renewable energy financing, unlocking previously unavailable financing options. With proof-of-work’s energy profile, negatively priced renewable energy that would have otherwise gone to waste can find a revenue-positive use while securing the Bitcoin network.
Additionally, Bitcoin miners can be of service to grid operators when prices rise too high, providing demand response functionality (reducing or eliminating energy load) and freeing up additional energy in times of critical need.
Demand response can coincidentally help reduce the need for natural gas and coal-fired peaker plants (a carbon-intensive and costly component of the grid) normally engaged during periods of peak demand. This type of market-enabled flexible baseload demand can help drive energy security and infrastructure resilience while reducing carbon emissions in the process. This capability has even been noted by the CEO of the largest grid operator in Texas (ERCOT) who called bitcoin mining a “great opportunity” for the grid.
Categorically, there is no alternative industrial process in the world than bitcoin’s use of proof-of-work capable of fulfilling such an important niche. It can even be argued that Bitcoin does not use enough energy to help stabilize the grid as quickly as would be ideal. All this considered, proof-of-work turns out to be a powerful solution for the grid rather than the “problem” for Texans The Guardian might have you believe.
Columbia Climate School
Bitcoin’s Impacts on the Environment: “To be competitive, miners want the most efficient hardware, capable of processing the most computations per unit of energy. This specialized hardware becomes obsolete every 1.5 years and can’t be reprogrammed to do anything else. It’s estimated that the Bitcoin network generates 11.5 kilotons of e-waste each year, adding to our already huge e-waste problem.”
Response:
The claim that the hardware for mining bitcoin “becomes obsolete” every 1.5 years, based on the study by Dutch Central Bank employee Alex DeVries “Bitcoin’s Growing E-Waste Problem”, is easily dismissed if one looks at real-world bitcoin mining data. Most bitcoin miners are in consensus that three to five years is a reasonable expectation for the extent of a mining rig’s profitable lifetime, yet some miners may continue functioning longer depending on the operator’s energy costs and tolerance for relative return on investment.
For example, Antminer S9 mining rigs, released in 2017, still make up a notable portion of Bitcoin’s hash rate five years later. As well, Antminer S15s, released in 2018, still account for a significant proportion of contribution to proof-of-work. Even a cursory look at the relative quantities of ASICs being used debunks the assumptions used by DeVries (and subsequently Columbia Climate School) are not representative of reality and should not be taken as such.
As said before, the Bitcoin network does not use energy on a per-transaction basis, yet DeVries and those who cite him continue to rely upon this misleading metric in order to create statistics that appear critical of Bitcoin. Even so, the aforementioned quote claims that each Bitcoin transaction somehow creates an iPhone’s worth of e-waste, totaling the equivalent of the “small IT” sector of the Netherlands, a country of 17 million people.
While this is an insignificant amount of e-waste, a mere drop in the bucket of the 53 million tons produced globally, it turns out to be massively overestimated on the assumption that 100% of the weight of each rig is indeed e-waste, rather than recyclable material or otherwise. In reality, the vast majority of the material within mining rigs comes from fans and heat sinks, with just milligrams of legitimate e-waste coming from the (nanometer-thick) semiconducting ASIC chips themselves.
In short, the study cited by Columbia is incredibly exaggerated, decontextualized and even undermines the school’s own premise of Bitcoin having a “huge e-waste problem” if taken at face value. That this unobjective attack was levied based upon work done by an acolyte of the Dutch Central Bank should not be particularly surprising.
As the limited lifespan of fiat currencies comes to a close, Bitcoin has emerged to take its place in re-connecting money to energy and restoring a sound foundation to global economic exchange. Inventor, scientist and environmentalist R. Buckminster Fuller may have put it best when he described the importance of global money once again coupled to thermodynamic reality in his book Critical Path (1981):
“In this cosmically uniform, common energy-value system for all humanity, costing will be expressed in kilowatt hours, watt-hours, and watt-seconds of work. Kilowatt-hours will become the prime criteria of costing the production of the complex of metabolic involvements per each function or item. These uniform energy valuations will replace all the world’s wildly intervarying, opinion-gambled-upon, top-power=system-manipulatable monetary systems. The time-energy world accounting system will do away with all the inequities now occurring in regard to the arbitrarily maneuverable banker-invented, international balance-of-trade accounting”.
Prescient indeed. Unstoppable energy money is finally here, and every watt used to secure the network from centralized control of the monetary system should be celebrated. The energy FUD is barking up the wrong tree and ironically happens to have found the sustainable monetary system they were looking for all along.