How Bitcoin fixes Climate Change
Below graphs show that with the current rate of progress, Bitcoin mining could soon likely consume almost as much energy as all the world’s transportation systems combined did in 2018 (~390 TWh per year):
A popular argument against Bitcoin often touted in the mainstream media is that this is an enormous amount of electricity it devours and it is all ultimately a waste of energy.
This is totally wrong on many fronts.
Firstly while it may seem like a lot of energy is required to run and secure the world’s first completely decentralized monetary network, compare this to the amount of energy the traditional financial system of the world runs on. I.e. add up all the energy expanded by the military industrial complex, all the banks, all the office buildings that house finance workers, all the server farms that run the centralized ledgers of payment providers etc. It’s impossible to put an actual figure on that amount of electricity because unlike in the case of Bitcoin which is fully transparent, these numbers are not easily or even publicly available. However it’s fairly obvious the energy above required to facilitate the US dollar reserve system would absolutely dwarf the amount of energy consumed by Bitcoin mining!
Then there is Gold — Bitcoin’s antiquated rival as a store of value — the process of mining Gold is far more toxic and damaging for the environment than Bitcoin mining is by any measure.
Secondly, no matter how much energy Bitcoin consumes, it is actually GOOD for the environment not bad! Bitcoin’s mining industry is ruthlessly competitive; the margins are so razor thin that miners are forced to seek out the lowest cost sources of power they can possibly find in order to make a profit. This drives them to energy sources that are completely isolated or which would otherwise go to waste. Some examples:
- Bitcoin mining facilities in Iceland such as Enigma leverage the abundant underground heat of the region harnessed by geothermal power stations.
2.. Gas producers often release excess Methane into the atmosphere via a process known as flaring. Flaring is very inefficient due to wind and Methane is one of the worst greenhouse gases for the atmosphere. In Copenhagen, a Bitcoin mining rig has been set up to be powered with this excess Methane run through an EPA certified generator. Methane that would have otherwise polluted the atmosphere via flaring.
And these are not just isolated examples. Renewables account for the largest percentage of Bitcoin’s energy mix. Bitcoin is literally manufacturing money from clean energy. As Bitcoin gains more adoption and the price increases, I envisage entirely new human settlements will be constructed around Bitcoin mining facilities located at isolated energy sources all over the world. Bitcoin is a highly-profitable use of energy which is location independent (Bitcoin mining can be performed anywhere as long as there is an energy source).
Thus in the future, humans will cluster around the cheapest and cleanest forms of energy as that energy is profitably converted to money through Bitcoin mining. And with money, infrastructure can be bought and built around it: roads, schools, hospitals, houses etc. Historically, energy has always had to be moved (expensively) to the humans. Now instead the humans will move to the energy.
Cheap energy leads to human flourishing. And for the first time ever, Bitcoin provides an extremely powerful profit-incentive for humans to migrate away from fossil fuels (which are already too expensive to drive Bitcoin mining) and to cheap, clean energy instead. Climate change will not be solved with various government mandated accords; it will be solved once there is a real (not some fake subsidy system) profit-incentive to use clean energy over fossil fuels. Bitcoin provides that.