Unchained Capital: How Bitcoin Mining’s Power Usage Is Good For Long-term Stability in the Economy
The Bitcoin network is consuming power at an annual rate of 32TWh which is about as much as Denmark. Each Bitcoin transaction consumes 250kWh, enough to power homes for nine days. Naturally, this is leading to concerns about sustainability and has constantly been the biggest criticism of Bitcoin.
However, a report from Unchained Capital shows that the necessity of Bitcoin outweighs its environmental impact. They go on to list a few points that shows the entire problem that the environmentalists point out are exaggerated:
- A significant portion of bitcoin’s energy consumption is generated from renewable resources.
- Bitcoin will spur innovation in the development of renewable energy technology & resources.
- Bitcoin consumes energy that is otherwise wasted, if not, flared into the atmosphere.
- Bitcoin consumes only the energy that the free market will bear at a free market rate.
- Bitcoin consumes energy resources that would otherwise not be economical to develop.
- The nature of bitcoin energy demand will improve the efficiency of energy grids.
Rather than discussing the energy consumption of bitcoin generally, people should be discussing the carbon production of bitcoin, and understanding whether certain mining towns are adding to an already large environmental burden.
There are countries where currency controls and economic corruption is commonplace and it’s a shame how many people aren't aware of the challenges of the underbanked. Bitcoin doesn’t need to compete with your VISA credit card with a $10,000 credit limit algorithmically calculated using various data points that determine your credit-worthiness as a US citizen.
It becomes clear very quickly that the argument for Bitcoin mining using excessive energy is completely overstated. Also, these numbers cited by mainstream outlets that criticize Bitcoin’s energy consumption do not include the massive amount of energy spent on operating bank vaults, security systems, transportation via armored cars, or even basic energy needed to operate a branch of a bank.