Ready for a Headspin? Why Bitcoin Mining’s Energy Consumption May Be Much Greener Than Told
It takes time for people to adapt to new technologies. The advent of cars saw multiple problems cropping up before they became an everyday fixture in our lives. The internet changed the way we interact with information. The rise of social media is still being felt and dealt with today.
Every single disruptive technology that vastly changes our world can be used for a net positive or negative to society. Bitcoin, and cryptocurrency, in general, is a truly disruptive technology because it has the potential to drastically change our entire mentality when it comes to money, economics and how we interact with the future.
Power, Bitcoin, And The Banks
Fiat money leads to growth, to be sure. It is also the reason we find ourselves in a perpetual consumer culture that encourages spending without restraint. Profligate consumption has very real consequences on our day to day lives. Trash piles are getting ever higher. Plastic is filling up the ocean as we speak. All these practices that many take for granted are having a net negative impact on our world.
So what? Bitcoin uses more electricity than in entire countries. That's also bad for the environment. Right? Well, we don't know. Miners are solitary creatures and many do not give out how much energy they use. It has long been a problem in the computing world that energy consumption has been judged incorrectly. Many models take the Thermal Design Power rating of a component and use that as the baseline. There are very few models that take into consideration the efficiency of the system as a whole and the amount of time it is reliably running.
That is not the only problem. The key information that is not talked about looking at studies of Bitcoin's power usage is how much competitors are using. It should surprise no one that estimates of the banking system put their power usage at many times that of Bitcoin. In fact, it has been estimated by industry leaders that if Bitcoin power consumption were to increase 100 fold, it would still only represent a fraction of the current power usage of traditional banks.
That is surprising to many in and of itself. An extra point to consider is that banks make the financial system work an that is that. It is an important job, but it is a very narrow one. The Bitcoin blockchain has a wide variety of uses. If it was using 100 fold more power, the number of problems in the world it could solve would be incalculable. It would also take a greater load off the banks' systems and actually create a net negative when it came to power consumption.
Inflationary Fiat Creates Unreasonable Demand
Many people have said that sound money, such as Bitcoin, is key to a more sustainable future. The money supply is fixed, and there is no possible way to perform Quantitative Easing by injecting more into the economy. Bitcoin is bound to the market, which is both good and bad. There were many people who lost money during the last crypto crash, but it has also brought about greater competition in the blockchain space.
More and more companies are opening up with blockchain solutions to modern problems. Problems that were unheard of just 10 years ago. Problems with governance are being solved by using blockchain voting mechanisms to ensure that human weaknesses such as corruption are drastically reduced. Trust is built more easily when you can rely on a machine to arbitrate decisions of the community.
On an even more important note – sound money completely changes the way we think about the future. Savings, not spending, will be more prevalent. Conservation, not consumption, will come to the fore. These are important changes in the mentality of the modern man. We are living in an age of too much for some, and nothing for others. A more even distribution of resources will help us combat the expected 2 billion extra people the world is expected to host by 2050.
Blockchain has come about at a time when the world is rapidly changing, and there is a need for new solutions to problems we might not even see yet. Just like the automobile revolutionizing supply-chains as well as personal transport. Similar to how airplanes, perfected for war, have contributed to a more open society via easier travel.
We are standing at the beginning of a new era, and blockchain will be a key driver of that era. A greener era where humans look to a better future for their descendants and not just to satisfy urges today.