Bitcoin’s Environmental Impact: How Overblown is BTC Mining’s Effects by the Mainstream Media?
Ever since Bitcoin became really popular sometime in 2015 and started to bleed into the popular consciousness, there have been attacks from every corner. This is a part of the natural order, as any new technology or innovation will be attacked by those who are part of the status quo. The one complaint about Bitcoin that has been ongoing is one of power usage.
Research suggests that Bitcoin pulls a lot of power and that the Proof-of-Work (PoW) algorithm is wasteful. Many people who are against Bitcoin have jumped on this train and have made it their mission to spread the word about what is in their eyes just another reason to reject cryptocurrency. The problem comes with the sensationalism in articles that do nothing to present a balanced view of the facts, that instead try and get more people emotionally fired up.
- Bad examples are commonplace, and how to debunk them!
- Bitcoin uses more power than Ireland!
- Bitcoin will use more power than the whole world in 2020!
- Bitcoin is like Big Oil!
These types of headlines are rampant in mainstream media, with even respectable publications such as Newsweek (the erstwhile publisher of the second headline) getting in on the action. The problem with these headlines is that they paint a completely incorrect picture of the entire situation. Particularly with regards to the side-effects of energy consumption by various competing industries.
So let's take a look at a few reasons why these headlines and articles have all been down a completely wrong path and how they ignore some of the most important aspects of the story.
First, let's start off with facts. Does Bitcoin consume a lot of power? Yes, of course, it does. The computational needs of a network as large and as popular as Bitcoin need power. The higher the price, the more people will want to get involved.
What isn't being said, however, is that it is not energy consumption just for the sake of making a buck. Bitcoin energy consumption is so high because it is a self-policing network. Look at the banking industry and how much power it uses. The difference between the two is enormous. Bitcoin's total energy consumption (in dollars) is measured as $4.5 billion annually. Banking, on the other hand, is $1.8 trillion. Yes, trillion with at.
Now many people will say that banking needs this power because of the money involved. The need to make sure that every transaction is being checked properly and to avoid scammers, money launderers and everything else the industry has had to deal with in the last 100 years since the invention of long-distance communications. That's all true, and it brings immense value to our society.
It is telling that it is precisely the banks that are looking to get in on the action with regards to blockchain technology precisely because it is a more efficient method of validating transactions than what they have been using up until now. The integration of blockchain into daily life will come unnoticed and will not be a revolution because it is simply a better way to do things — decentralized trust, decentralized power consumption, and more security for all.
Is Bitcoin Worth It
So blockchain is definitely useful, and the underlying technology of Bitcoin is already being adapted to many different situations around the world. However, that doesn't answer the question of whether Bitcoin is useful for the amount of power it consumes.
Which is a valid point – one not made in those sensationalist articles though. At this point in time, Bitcoin is worthless to the global industry than any other massively (energy) wasteful industry. However, that could all change. It could also not change, and another cryptocurrency could feasibly rise to take its place. That cryptocurrency would then absolutely be worth the power spent on it.
There is also something to say for the decentralized nature of Bitcoin. There is more chance of green energy being used as evidenced by China looking to solar to power an industry that it does not really approve of. However, it could just as easily ban Bitcoin mining which would kill about two-thirds of the power consumption overnight.
There is still a lot longer to go with the adoption of cryptocurrencies as legal tender, and how these will be able to navigate the complex strands that connect us all will be interesting to see. One thing is certain, and it is that cryptocurrency and Bitcoin might not be perfect now, but with the rate of innovation and improvement, it can only get exponentially better and more efficient. What other industry can say that?