- The environmental cost of Bitcoin mining has become the new focus for mainstream media outlets
- Bitcoin mining operations are in fact becoming ‘greener’ with every passing year
- In a few years the argument could be non-existent
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. Mainstream media outlets have recently banded together to criticize Bitcoin and cryptocurrency mining centers and the amounts of electricity they use. 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
The recent attacks are certainly not the first time that analysts and media outlets have spoken out against the energy consumption of Bitcoin mining centers, but their concentration on the issue has certainly strengthened in the past few months. This is in light of the fact that with all the recent institutional interest in Bitcoin they can no longer criticize its value proposition, so they have shifted focus to its carbon footprint. This mantra has had its intended effect and spilled over into the general public’s collective consciousness, who now follow the media’s lead and criticize the carbon footprint of everything from Bitcoin mining to NFT production in comments sections and on social media.
Proven to be Perfectly Practical
However, these criticisms feel somewhat on the hollow side. Bitcoin is obviously driven by its own underlying technology, effectively creating an industry off its own back. Critics say that Bitcoin is nothing but wasted energy, but it isn’t solely intended for speculation, as the coronavirus pandemic has proved. It has the potential to not just reinvent the concept of personal banking but also change countries in which the underbanked struggle to gain access to financial services.
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.
Bitcoin’s Growing Pains
Another factor that is seemingly being ignored by critics is the youth of the digital currency market. The entire industry is only thirteen years old, and the technology used to power it is only really beginning to evolve. It is undeniably unfortunate for Bitcoin that the bulk of its mining operations became focused in China where cheap coal-powered electricity is easily accessible, although this concentration is becoming more diluted over time.
Moving Towards Renewable Energy
We here at FullyCrypto have discussed debunking the great Bitcoin energy consumption myths in a post that touched on what will eventually put criticisms to bed. The cryptocurrency market is already going to tremendous lengths to make energy consumption a non-issue, a large part of which is 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 amount of 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.
Mining technology itself is also constantly evolving to be more efficient, with the least efficient operators being priced out of the market, while the industry is also a leading driver in carbon capture technology research. 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.
Time They Are A-changing
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 natural energy sources and developing more energy efficient equipment.
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, with figures heavily disputed and often nothing more than educated guesses. 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.