How much does Bitcoin really pollute?
Paraphrasing Kjell Inge Røkke, Chairman of the Norwegian oil company Aker ASA, if Bitcoin really is a speculative bubble, environmentalists have nothing to worry about because before we know it, the Bitcoin fever will disappear just like the tulips, and with it, the electricity consumed.
If, on the other hand, Bitcoin demonstrates its use case as a store of value, we should compare it to gold. The estimated CO2 emissions involved in the production of new gold are around 100 million tons per year. That's not counting the refinery and storage. And without taking into account the negative impact of gold excavations not only on the environment but also on the people who inhabit these lands. However, Bitcoin, according to recent estimates, emits around 30 million tons of CO2 per year. A significantly lower amount than gold.
“If Bitcoin manages to be digital gold,
will emit much less than the asset it replaces”
Kjell Inge Rokke
Finally, if Bitcoin demonstrates its use case as a monetary architecture on which an ecosystem of applications can be designed to facilitate micro payments, foreign trade, international remittances, etc., given that the rate of production of new bitcoin tends to zero, In the future, transactions on the Bitcoin network will have to be huge in order to pay commissions to miners and keep their business profitable. This implies that large transfers of money would take place on the Bitcoin blockchain, leaving smaller transfers for linked chains (such as LN) according to the layering system explained above. Necessarily, these fees will only be economically viable if the network and its associated applications provide sufficient value for its users.
"Bitcoin, therefore, can only survive,
and the corresponding electricity can only be consumed, if the value created by the network is sufficient to allow it."
Kjell Inge Rokke
Yes, okay, but Bitcoin consumes a lot of energy…
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Not so much. And, above all, what kind? We know that the world generates 160,000 TWh of energy per year, of which 30% is wasted. By “wasted” we mean that if more is produced than is consumed, it is lost. For example, a solar panel produces a lot of energy on sunny days, but many times not all of it is consumed. Using batteries to temporarily store excess power is not always an economically viable option. Therefore, generation plants are often oversized to cover demand peaks (when there is an important soccer game or a cold or heat wave) at the expense of energy wasted on other occasions.
Well, Bitcoin currently consumes 120 TWh of energy per year. Or what is the same, 0.25% of the energy wasted. Bitcoin mining has the potential to act like a battery by using some of the wasted energy to transform it into money.
If we put a mining farm next to a solar panel farm, it will greatly reduce wasted energy, because it can be used to mine bitcoin.
In other words, Bitcoin can improve the economy of renewable energy generating plants, even promote them, given the energy and economic efficiency achieved.
And not only that, energy is also wasted in transmission and distribution from the generating plant to the transformation center and later to the home. In contrast, a mining company does not need to be in the center of a city, or even in the center of a small town. The mining farm can be located next to the power plant, thus avoiding losses linked to transmission and distribution.
Hydroelectric mining has proven to be a favorite. There are many fairly isolated dams that have the potential to generate endless emission-free electrical energy. This is the case of Wenatchee, the small city in the state of Washington, in the United States, which has become fashionable among miners. In that town, located on the banks of the Colombia River, there are a dozen mining companies generating a new economy, since direct and indirect jobs are created. Again, there are no transmission losses because mining farms can be located close to dams, making this renewable energy source the preferred source for miners.
According to the Cambridge University report published in September 2020, 39% of bitcoin mining activity comes from renewable sources, surpassing many industries in the world in renewable ratio. Compared to 28% the previous year. Let us remember that the miners are the first beneficiaries in trying to reduce their electricity costs and therefore seek the use of renewable energies. And governments today are not going to subsidize them (although they should).
In short, bitcoin mining activity naturally looks for places where energy is overproduced, but underconsumed, in such a way that it constitutes a way of taking advantage of wasted energy and a system of incentives for solar, wind, hydroelectric energy...
It's funny to hear criticism of Bitcoin from people who consider themselves very responsible with the environment, but their hobbies are watching Netflix, traveling the world and spending hours on Instagram without even dreaming that these activities also pollute.
Bitcoin brings progress, innovation, freedom, sovereignty and opportunities for a decent life for Humanity (including the unbanked, forgotten by the system). Don't you think it's worth continuing to explore it before completely crossing it out because it "pollutes a lot"? What's more... thinking about it coldly, if Bitcoin fails, the world will continue to waste the 120 TWh that Bitcoin represents annually...
WHAT YOU JUST READ IS AN EXCERPT FROM MY BOOK "HOW TO INVEST IN BITCOIN AND CREATE A MILLIONAIRE MIND"
all about bitcoin
Bitcoin is a digital currency that circulates through its own network of computers connected in a decentralized way. Precisely because it is decentralized, it does not require any central or local authority to manage it. Hence the libertarian character of the currency.
all about bitcoin
In a parallelism with the Internet, it is said that the penetration of Bitcoin in society is in a period equivalent to the 90s, when the network of networks began its gradual adoption. The process of adopting a new technology is widely studied. In addition, a series of medium and long-term models developed by macroeconomic investors of various kinds are available.