The “ridiculously wasteful, malignant, guzzling” of electricity usage by Bitcoin miners is “illegally siphoning power, causing country–wide blackouts, not remotely sustainable, and is ruining the planet.”
“By July 2019, the Bitcoin network will require more electricity than the entire United States currently uses. By February 2020, it will use as much electricity as the entire world does today.”
Run for your lives, Bitcoin will kill us all! But wait, before we all go running for the nearest fallout shelter, let’s just examine for a minute if there’s any truth behind these claims. Will Bitcoin really boil the oceans? Unsurprisingly, upon conducting a most basic investigation of the above headlines, the majority turn out to be nothing more than specious defamation, propagated by click-baiters (at best), fear-mongers (at large), and outright liars (at worst; yes ).
That being said, a few of these articles do cite some apparently legitimate statistics regarding the energy consumption of Bitcoin miners: e.g. “Bitcoin [is] about 5,033 times more energy intensive, per transaction, than VISA, at current usage levels,” “each Bitcoin transaction requires the same amount of energy used to power nine homes in the U.S. for one day,” and “Bitcoin mining now consuming more electricity than 159 countries including Ireland and most countries in Africa.”
While there are some fairly large assumptions made above, a few of the statistics seem to be backed by reliable data and calculations and must be taken seriously. This generation must fearlessly undertake an all-inclusive accounting of the environmental impact that our modern civilization has on the biosphere and take immediate action to reverse those adverse impacts.
In order to create a sustainable future for our planet, it’s absolutely vital that we stop paying attention to economic bottom lines only. Instead, we ought to hold all socioeconomic entities to positive triple bottom lines, those being economic, social and environmental. Furthermore, we ought to insist that all human institutions maintain a positive triple bottom line. One of the most important tools we can implement in this process is the Life Cycle Analysis (LCA).
LCAs require much deeper and far-reaching analysis than is currently required by existing systems of financial accounting, where the primary concern is the potential financial gain of shareholders above all else. In addition to such accounting systems’ narrow and naive focus on shareholders’ profits, a triple bottom line LCA includes global environmental, social, and economic impacts across the entire life-cycle of the subject of focus. For example, the environmental and socioeconomic portions of an LCA may include (but are not limited to) the following concerns:
- energy, material, and living inputs and energy, material, and living outputs involved over the course of the product’s entire life-cycle
- e.g. mining of raw materials, transportation, refining, manufacturing, point of sale, usable lifetime, recycling, disposal of waste products, etc.
- physical, mental, and social impact on the well-being of all life forms impacted by the product over the course of its entire life-cycle
- e.g. plants, animals, locals, producers, manufacturers, sellers, consumers, recyclers, disposers, any third parties, etc.
Going to the effort of carefully, honestly, transparently, and inclusively creating such LCAs is no trivial task; however, the importance of such thorough analysis increases in step with humanity’s increasing power to affect the Earth’s chemical, geological, biological, and social systems.
Unfortunately, I myself lack the resources to undertake such a comprehensive triple bottom line LCA for the Bitcoin mining and legacy financial industries. But after a fairly lengthy search, I did finally come across a rather detailed series of analysis written by Hass McCook and published on CoinDesk, in 2014. I highly recommend reading through this five part series if you are interested in a comprehensive comparison of Bitcoin mining to the existing gold production, fiat minting, and banking industries. Otherwise, here are Hass McCook’s compiled data tables for his triple bottom line comparisons of the industries:
Additionally, here is the tl;dr version of some other relevant information I came across during my own research:
Note: I’ve omitted gold production, because despite its usefulness as a benchmark, it is not in direct competition with Bitcoin unlike the fiat minting and banking systems.
- coins are being phased out globally, because they cost more to mint than they’re worth
- polymer bills (used in Canada, Australia, and UK) cost twice as much as cotton-paper bills, but last 2.5-4 times longer
- global inflation rate is 3.9%, thus fiat savings are worth less than half their original value after only 20 years
- fiat currencies are plagued by counterfeiting, laundering, fraud, corruption, criminal activity, and the human suffering and death associated with such
- the world’s ~2,394,700 ATMs, alone, used 18.9PJ of energy and produced 3.2 million tonnes of CO2in 2014
- the banking industry is thieving, criminal and corrupt to its core, by design
- the banking industry plays an integral role in global corruption, money laundering, organized crime, terrorism, and human devastation
- seven million people are employed by banks and financial institutions internationally
- these jobs would largely disappear if Bitcoin took over (would anyone cry over a few million bankers being out of work?)
- Bitcoin is providing cheap, and simple access to banking and the global marketplace for billions of the world’s poorest people, a practical impossibility under legacy financial systems
- Bitcoin mines require very few employees (<50 employees at even the largest mines)
- employee commutes are virtually non-existent
- over the years, Bitcoin mining rigs have dramatically improved their Power Usage Effectiveness (PUE) to well below data center industry standards
- the useful life of most mining equipment is only about three to six months
- in 2014, Bitcoin had 99.8% fewer CO2 emissions than the banking system
- in 2016, Bitcoin mining used 0.87% of the total US electricity consumption
- the Bitcoin network and market share could scale millions of times over and it’s environmental impact would remain insignificant compared to legacy systems
- a yearly mining electricity usage lower bound of 9.636 TWh (34.69PJ) has been calculated by one estimate
- this lower bound could serve as a natural equilibrium that mining energy consumption may converge to, all else being equal (BTC price, technological innovation, etc.)
- current (December 2017) Bitcoin mining’s yearly electricity consumption, by one estimate, is 32.56TWh (117.216PJ)
- in 2017, Bitcoin mining CO2 emissions was ~9.2% that of the legacy banking sector
- 2014 energy consumption relative to 2017: 0.70712TWh / 32.56TWh = 0.0217 ~= 2.2% (~46 times increase over the past 3 years)
- 2017 Bitcoin CO2 emissions relative to banking industy’s: 0.002 * 46 = 0.092 = 9.2%
- assuming that the banking industry hasn’t grown and that it uses the same percentage of renewable energy as Bitcoin miners, both of which are not the case
- Bitcoin mining is already a driving force for accelerating the global transition to renewable energy and decentralized energy production
- miners are shifting, large scale, to the cleanest forms of energy: geothermal, hydroelectric, natural gas, natural cooling, solar, wind
- this is because, Bitcoin mining is location independent and renewable energy prices are far more stable and offer a long term hedge against fossil fuel costs
“Now, Bitcoin is an environmental subsidy to alternative energy all around the world because it’s causing these projects to be amortized over a year instead of five. Oh you’re telling me we were running a green coin all this time and I didn’t even notice!?… The decentralization of Bitcoin is driving the decentralization of energy production, which is one of the most important trends in human history… The level of security that we have for Bitcoin today is a level of security that can handle global attacks by colluding nation states: that’s the level of security that is needed for this system to remain censorship resistant. But if the system was 10 times bigger with 10 times more users, it doesn’t need 10 times more mining. It already has globally secure mining: what we have is enough. There’s a profit motive that drives it. But it’s a mistake to think that if we go global that cost will multiply; quite the opposite in fact. Over time the reward for mining decreases, and as a result, it’s more likely that we’ll see that gradually taper off and plateau.”
Provided the overwhelming evidence above, it should be abundantly clear that Bitcoin’s triple bottom lines are in a class all their own when compared against the tremendously inefficient, costly, bloated, dirty, corrupt, thieving, criminal, and all-too-often blood-soaked legacy institutions of gold, fiat, and banking. In accordance with its founding principles, Bitcoin will sweep aside the curtains, open wide the gates, shine a light in the dark places, and drive the money-changers from the temple! The day of reckoning cometh…
By Landon Mutch via CryptoInsider