Every time the Bitcoin price jumps a swarm of kombucha drinking hipsters flock to Vice to take stabs at writing hit pieces on the energy consumption of Bitcoin.
Bitcoin is back in the spotlight these days thanks to some wild price movements and central bank meetings. The decentralized currency has recently been trading over its all-time high of $1200 on some exchanges. But the higher the price goes, the more it exacerbates bitcoin’s dark side: shocking levels of electricity consumption.
Odd that you don’t see Vice publishing articles on the “Underbelly of Google,” which consumes about 5.7 terawatt-hours.
Of course, the enviromarxists at CNN have Bitcoin on their hit list too.
Bitcoin uses about 32 terawatts of energy every year, enough to power about three million U.S. households, according to the Bitcoin Energy Consumption Index published by Digiconomist, a website focused on digital currencies.
By comparison, processing the billions of Visa (V) transactions that take place each year consumes the same amount of power as just 50,000 American homes, according to Digiconomist.
CNN sites the Digiconomist statics which, according to the crypto researcher Marc Bevand, had some serius faults in calculating his Energy Consumption Index. The comments section of the post has an impressive eleven month ongoing back and forth between Digiconomist and Bevand debating the upper and lower bound of energy consumption in mining. Bevand makes a well-reasoned case that the number is closer to 15 terawatt-hours rather than 32 terawatts CNN sites.
Yes, the number of miners increase whenever the bitcoin price jumps, because a higher priced bitcoin means more captured profit for the miners. But there’s also a system of regulation built-in to protect against infinitely expanding miner growth in Bitcoin itself. There is a halving every four years, that halves the block reward available to the miners, reseting with a lower incetive to mine.
Regardless of what numbers you belive. The sustainability of energy is a valid concern, a concern miners share. Because its in the interest of the miners to keep down costs and use the most efficient miners on the market. One of the largest known bitcoin mining facilities owned by BitFury, is powered by a nearby hydroelectric dam. Not all energy is create equal, not all electricity is powered by coal.
An engineer of Etherium Classic and Global Financial Access (a mysterious smart contracting company owned by Nick Szabo) Elaine Ou, provides some useful ammo in the battle of bitcoin energy debate against the enviromarxists.
Global production of cash and coins consumes an estimated 11 terawatt-hours per year, while gold mining burns the equivalent of 132 terawatt-hours. And that doesn’t include armored trucks, bank vaults, security systems and such. So in the right context, bitcoin is positively green.
I’ll take the hydroelectric powered Bitcoin over scrapping old electronics from the garbage and dousing them in cyanide for the gold. Thanks.