Bitcoin Network Becomes More Efficient While High Costs of Fiat Money Production and Supply Rises
One of the most reported criticised aspects of Bitcoin since its inception is its energy consumption. In One of every few reports on BTC, the issue of its high energy consumption is discussed, some even say that BTC consumes the same amount of electricity as a small country.
However, vilifying BTC on simply energy consumption is somewhat reductive, after all, a whole lot more goes into the current fiat money system than just about 10 thousand supercomputers running non stop.
The major problem environmentalists have with Bitcoin (BTC) mining and its high electricity consumption, which is definitely true, however does not show the whole picture.
ENERGY SUPPLY EVOLUTION
Renewable energy (green energy) adoption is gradually becoming more and more popular globally. With the move from fossil-fueled Bitcoin mining equipments in China to those using hydroelectric or geothermal power, it is quite obvious that the people running these Bitcoin mining machines are keen on increasing profits by migrating to the wide, untapped and cost effective green energy sources.
Now, in comparison with the operations of any Federal reserve or national bank, which requires buildings, machinery, manufacturing plants and a whole lot more to be constructed and operational in order to create a system that the populace must trust before it can be used in any way.
This alone is bad, however there is another, mostly unspoken environmental cost of this conventional monetary system, the “cash itself”.
COST OF PRODUCTION AND SUPPLY
In the United States alone in 2018, about 7.4 billion bank notes were produced.
The thread tweets below shows the cost of each stage of the cash production in the current financial system:
In 2018, US taxpayers paid…
$800M to manufacture US dollars
$24M to transport them
$14M for quality assurance
$7M for counterfeit deterrence
There is still an estimated $3B counterfeit bills globally.
Bitcoin costs tax payers nothing. There are zero counterfeit bitcoins. pic.twitter.com/erLOzrDSeo
— James Todaro (@JamesTodaroMD) May 31, 2019
“In 2018, US taxpayers paid…$800M to manufacture US dollars, $24M to transport them, $14M for quality assurance, $7M for counterfeit deterrence. There is still an estimated $3B counterfeit bills globally. Bitcoin costs taxpayers nothing. There are zero counterfeit bitcoins.”
This shows what a lot of people don't realize that they are the ones that bear this costs which over time reduces the value of their labor. It's the taxpayers that funds all this, not the Federal Reserve.
On the other hand, Bitcoin mining requires no taxpayers money, as the network requires no external funds. Both the system itself and the users pay for the security of the network.
Other factors which require a lot of funds in the current financial system include:
- Circulation of the produced notes
- Special ink used to ensure the notes can't be counterfeited
- Gelatin used for durability of the notes
- The cost of the design of new notes every few years to avoid counterfeiting
With all these factors and many more unknown expenses, it is impossible to know the actual total amount of funds spent in the current financial system on cash production and supply.
Cryptocurrency and blockchain technology is a nascent one, so it will be in the hindrance of progress for an environmentalist to demonize Bitcoin simply because of its high power consumption. New technologies always get more efficient in time and Bitcoin will definitely be no different. Bitcoin is already on the efficiency path as Canada and Iceland are already harnessing hydropower and geothermal energy respectively.