The debate about Bitcoin mining and climate protection is almost as old as Bitcoin itself – and characterized by misunderstandings on both sides. Therefore, we present three bad and four good arguments.
So first the bad arguments. It’s best to keep them out of the discussion, and they’ll help you recognize someone who may be leading the discussion with less-than-serious intentions, but rather grasping at straws to be right.
“But that’s the wrong data…”
How much electricity Bitcoin actually uses, and how much of it comes from fossil and renewable sources, is difficult to determine. There are no concrete answers, just estimates. Anyone who dismisses Alex de Vries’ data across the board because he is a Bitcoin skeptic, but trusts Daniel Batten’s without reservation, even though he is close to the miners, creates little credibility. Regardless, even the most optimistic estimates show that miners’ electricity consumption is growing faster than it decarbonizes, and that mining’s CO2 emissions are equivalent to those of a small to medium-sized industrial country. You can twist it until it turns into a nail – it doesn’t get any better.
“But the banks…”
It is often said that the banking and financial sectors use as much or even more electricity as Bitcoin. This is also extremely difficult to measure. But even if so, it only serves as a good template for an even harsher criticism of Bitcoin: because the banks serve orders of magnitude more users, while the infrastructure that is necessary for this is not yet taken into account in the electricity consumption of Bitcoin. Full nodes, servers, exchanges, block explorers, internet traffic – all of this has to be added to the consumption of the miners, and there will be much more when Bitcoin becomes the means of payment for billions.
“But mining helps the energy transition…”
As strategic large-scale consumers, it is said, miners can help to develop renewable energies and, for example, reward the burning of methane gas. This has been postulated by numerous studies and papers and also confirmed with some success stories. But the bottom line is that it cannot be denied that this is just a drop in the ocean that does not even begin to compensate for the climate damage caused by CO2 emissions. You can discuss why this is the case, you can blame everything except Bitcoin – the governments, the electricity companies – but that doesn’t change the facts. And the miners are slowly running out of time to keep their grandiose promises… Which brings us finally to a good argument.
Good arguments
There is no black and white or easy answers in this debate. But in addition to the bad ones, there are also good arguments, which we present below.
“Halving regulates electricity consumption by itself.”
The Bitcoin halving is an effective mechanism to regulate electricity consumption and also the ecological consequences of Bitcoin. Every four years, the number of Bitcoins that miners find per block halves: in 2009 there were 50, now there are 6.25, and at the end of April there will only be 3,125. Although the price increase has so far more than offset the effects of the halving, nothing grows forever. Even with optimistic assumptions of mid-six-figure prices, mining electricity consumption will stagnate and eventually decline over the next ten years. This self-regulation works more effectively and quickly than any political intervention can.
“Other investments also have a carbon footprint – most of them even have a higher one.”
One perspective on the ecological effect of Bitcoin mining is to calculate the carbon footprint of a euro invested in Bitcoin and then compare this with that of other investments. Although the data here is based more on estimates than facts, there is much to suggest that a euro invested in Bitcoin has a lower carbon footprint than the average of S&P stocks – not to mention individual heavy industrial stocks – and probably also as government bonds with which governments finance their concrete frenzy. So it wouldn’t be far-fetched to say that a euro invested in Bitcoin is better for the climate than if it stays in a savings account.
“Bitcoin is less bad than factory farming and tourism”
If you compare Bitcoin’s CO2 emissions to other industries, they are completely negligible in the overall picture. Tourism alone uses about 50 times as much CO2 as Bitcoin, and agriculture emits about 30 times as much. More than half of agricultural emissions are based on meat consumption. And unlike Bitcoin, the mass production of meat causes damage to health, is the main driver of species extinction and is based on endless animal suffering. One could counter the complaint about the electricity consumption of Bitcoin by saying that the other person should please stop eating a schnitzel every day.
“Bitcoin as the midwife of a new economy.”
But it’s not just about tourism, not just about agriculture, not just about data centers, videos, textiles, cosmetics – it’s about the crazy abundance that is renewed every day by a toxic, smelly, smoking plastic tsunami across the globe rolls. The irrepressible growth drive of our economic system was the best medicine against poverty that humanity has ever had. But the terrible consequences for our planet can no longer be denied. Scarce money like Bitcoin could help bring a new, more sustainable economic system into being.
Source: https://bitcoinblog.de/2024/03/27/gute-und-schlechte-argumente-fuer-den-stromverbrauch-von-bitcoin/
