Bitcoin’s energy consumption has always been a controversial subject. The figures show that it is by no means as extreme a problem as some would have you believe, but that doesn’t mean that it’s a discussion that’s going away. Industry analysts have recently spoken on how Bitcoin and cryptocurrency mining centers are spending excessive amounts on electricity. The fear is that the process of mining and verifying the world’s leading cryptocurrencies could impact the global environment, but as per usual, what’s behind these claims remains disputable.
The same tired argument
It’s certainly not the first time that analysts have spoken out against the energy consumption of Bitcoin mining centers, but this time around they’ve labeled them as an “environmental disaster.” The issue is that as time moves on, there is every chance that the energy consumption levels related to mining Bitcoin will bypass the electricity consumption of households. Smari McCarthy – leading Pirate Party member – feels that Bitcoin’s supposed excessive energy consumption is impractical, as Bitcoin is now a “financial speculation” commodity. She said, “We are spending tens or maybe hundreds of megawatts on producing something that has no tangible existence and no real use for humans outside the realm of financial speculation. That can’t be good.”
Proven to be perfectly practical
McCarthy’s statements feel somewhat on the hollow side. Bitcoin is obviously driven by its own underlying technology, effectively creating an industry off its own back. Discounting many of these “unpractical” claims, Bitcoin isn’t solely intended for speculation. It has the impact to not just rework the banking process, but also change countries in which the underbanked struggle to gain access to financial services, as Bitcoin can easily operate as a viable alternative currency. For example, in Venezuela Bitcoin has changed the life of locals. Many will be unaware of the fact that the Venezuelan bolivar has become practically worthless, so citizens have turned to Bitcoin to order to purchase medicine, food, and basic goods. Bitcoin has proved to be lifesaving in recent times, counteracting recent statements and proving that its practicality is going undocumented.
With youth comes change
Another factor that is seemingly being ignored by analysts is the sheer age of the digital currency market. Any technology-driven market that is in the formative stages of growth will often face high levels of energy consumption, with this being especially true for industries emerging out of the fintech sector. Costs might be high now, but as technology evolves, things should change and become more efficient in the process. While there isn’t going to be an overnight shift, those criticizing Bitcoin often ignore the sector’s age due to its stunningly-high market cap.
Moving towards renewable energy
We here at BitStarz have discussed about debunking the great bitcoin energy consumption myth that have been thrown at Bitcoin before. Our prior blog is certainly worth a read, as it touches on what will eventually put what many analysts have said to bed. The cryptocurrency market is already going to tremendous lengths to make energy consumption a non-issue. This involves the mass uptake of renewable energy.
Cryptocurrency miners understand that reducing energy costs are key to increased profit. Countries like Chile, Peru, and specific regions in China already generate a mass amount of electricity from renewable sources. It’s reached a point where electricity is commonly distributed for free in such nations. In Chile, the country is able to generate a huge amounts electricity from solar power, with more mass-scale solar plant projects on the way. Effectively Peru is moving towards being a totally clean energy nation, which is something that cryptocurrency miners will surely look to take advantage of.
Within Europe it’s actually a similar story. As in Norway, another popular country for cryptocurrency miners, 95% of the electricity generated comes about through hydropower, with it being a similar case in Iceland. In both countries, electricity is almost entirely generated by clean and renewable energy sources. What’s becoming clear through a combination of green energy adoption and industry progress is that Bitcoin’s energy consumption issue is effectively resolving itself.
Buying into the fear
Speaking on Iceland’s appeal to cryptocurrency miners, along with the concerns it potentially brings, Johann Snorri Sigurbergsson (HS Orka Spokesman) said, “If all these projects are realized, we won’t have enough energy for it. What we’re seeing now is…you can almost call it exponential growth, I think, in the [energy] consumption of data centers.” At this point, many have questioned the validity of this statement, but as is the case in the past, should Iceland become too expensive from an energy perspective, miners will relocate again to a nation that proves to be more cost-effective.
Bitcoin is going green
The image that the mainstream media presents is that the cryptocurrency market is an energy-hungry beast, but that is pretty far from reality. Miners don’t want to incur huge energy costs, as it isn’t financially viable. The market is actively working towards becoming much greener, exploring regions that have cheaper and – in some instances – free electricity distribution. Miners will target regions that have strong levels of renewable energy, moving away from regions that carry high-level energy costs. Even if it might not seem like it on the surface, Bitcoin and the cryptocurrency market at large is going “green” in its own way.
More of a non-issue than anything else!
Analysts without a true understanding of Bitcoin’s purpose are quick to point the finger at its supposed high-level energy consumption. The problem is that these claims are usually based on conjecture more than anything else. Remember, when it comes to Bitcoin’s energy consumption, don’t believe all you read, as the reality is that Bitcoin’s mining costs are becoming more of a non-issue with each passing day.