Crypto Canal

Bitcoin and energy

Author: Lukáš Urza Kubíček

Bitcoin consumes more energy than some countries. It is true. But the same can be said for Google, YouTube, Facebook, Amazon, cruise ships, Christmas lights, clothes dryers, private jets, zinc production, and basically any major industry.

I have wanted to write about Bitcoin and energy for a long time. I have pictures and resources for it and it will (hopefully) be interesting.

Energy more than Argentina? Really?

Yeah, but. There are approximately 197 countries on Earth +- depending on who recognizes whom. And most of those countries are relatively small. And one imagines the big countries. There are huge differences in energy consumption between the big few and the rest. The Czech Republic has fewer inhabitants than larger cities in the USA or Asia. But it would not be so bombastic to compare the consumption of Bitcoin with the city.

This chart shows energy consumption by country, and there’s also Bitcoin:

 

Comparing anything global with countries reveals that the author did it on purpose for shock effect. You can always find a country small enough for what you want to compare. It’s such a minor manipulation.

Let’s compare it to something else.

 AC = air conditioning. Wow, I wonder where air conditioning would rank on the energy consumption of countries?

Is the power consumption bad?

There are implicitly hidden two sub-questions. Firstly, if we have little energy and we should conserve it, and secondly, if it harms the environment.

Are we low on energy?

It’s a pity that there is no thermonuclear reactor that would constantly send us practically unlimited amounts of energy for free. Oh wait..

You know that picture where there is a small square in the Sahara on the world map, which is the area that solar panels would cover the world’s electricity consumption? So here is his updated version:

So we have enough energy as such.

And we’re just getting started. Here is a graph of the historical energy consumption of the entire human civilization. It’s exponential and if we don’t screw it up, it’s going to go much higher. And that’s good. We just have to quickly switch to the clean energy that won’t make us so warm here. Burning dead dinosaurs is really not a sensible way to get energy.

Does electricity harm the environment?

Electricity is just vibrating electrons — (well, it’s actually a lot more interesting) and vibrating electrons don’t do any harm to the environment.

If electric cars are eco, then Bitcoin is also eco. As with cars, it’s about how the electricity is produced.

Bitcoin miners use somewhere around 50-60% of energy from renewable sources. Why? Because it’s cheaper. Once a hydroelectric plant or a solar system is installed, electricity production is then very cheap. And Bitcoin miners like that cheap energy, which is perhaps less available.

If anything, Bitcoin is an example because few industries have such a large proportion of renewables.

And how much is it for CO2?

If we know the general electricity consumption and the share of renewables, we can calculate the approximate CO2 production of the Bitcoin network.

It is somewhere between 40 and 70 MtCO2 — depending on which model you use for the calculation and which year you take.

The University of Cambridge has these figures for 2019:

Which is less than how much CO2 is produced by gold mining. Yes honey it’s still mining, I don’t understand why either.

Comparison with air conditioners, cattle, fashion, gold mining. CO2 production

Those air conditioners again. Don’t we ban them? Or video games?

A little more numerically. There is that zinc and dryer production in the US:

But I don’t use Bitcoin for anything, so it’s a waste anyway

The last time someone centrally tried to decide what is useful and what is useless and how society should function, it didn’t turn out very well. Let’s leave it to the people, if they want to pay for it voluntarily, then it probably has some value for them.

For me and a lot of other people, Bitcoin is a tool to save in a time of inflationary money and a state that I definitely wouldn’t rely on for a pension.

At the beginning of the war last year, Bitcoin was one of the tools for the Ukrainians to send money quickly.

For many people, Bitcoin is a way for them to transfer their finances across borders from authoritarian regimes without having to worry about someone taking it from them at the border.

For people in Venezuela, Turkey, Libya and many other countries, Bitcoin is a tool to protect themselves against currency devaluation.

People like Anita Posh or Farida Bemba Nabourema see Bitcoin as a tool to help and fight for human rights in Africa.

Thanks to Bitcoin, Roya Mahboob was able to start a business as a woman in Afghanistan and today she is helping other women.

For people like Troy Cross or Daniel Batten, bitcoin is a tool for working with renewables and the environment.

Bitcoin is the first electronic public global money that is not controlled by any government, corporation or bank. It’s open source money by the people for the people.

And someone probably doesn’t like that very much.

 Conclusion?

Bitcoin needs electricity to be secure and to be able to function decentralized, without states, banks, corporations and other overlords. The consumption of bitcoin miners today is on the order of magnitude somewhere on the level of data centers and air conditioners.

Electricity itself is not harmful to the environment, and Bitcoin has a large proportion of clean energy from renewable sources. And this will increase in the long term.

We have enough energy and we need to switch to clean energy as soon as possible. The amount of energy consumed worldwide will grow manifold, what Bitcoin consumes today is nothing interesting, it is at the level of a rounding error from a global point of view. The most interesting thing about it is why it appears so often in the media and other things are not talked about.

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