Bitcoin’s power consumption gives the token a bad rep. With conversations in the industry being focused on how much power the network consumes, it may be a good thing for the future.
Bitcoin is often pegged as the least sustainable digital asset, having a reputation for being the most power-consuming. But with the power-costly transactions, Bitcoin remains the most secure blockchain network in history.
“We see our energy use, really, as a feature of proof of work,” says Canadian Bitcoin miner Hut 8’s CEO Jaime Leverton. Proof of work is a mechanism in which Bitcoin transactions are verified by.
Many US politicians are quick to jump to criticising Bitcoin mining as a contributing factor to climate change. But MicroStrategy CEO Michael Saylor, known for being Bitcoin faithful, notes that miners can turn wasted energy into Bitcoin, storing it in cyberspace in its new incarnation.
Bitcoin mining consumes roughly the same amount of electricity as Washington state—putting pressure on our power grids and worsening the #ClimateCrisis. We need to protect our planet and crack down on environmentally wasteful crypto mining practices. https://t.co/ChKYcD82gH
— Elizabeth Warren (@SenWarren) September 7, 2021
In a nutshell, Bitcoin mining generates Bitcoins. In creating new Bitcoin, a network of miners race to ‘mine’ for Bitcoin token rewards, or solve for Bitcoin’s next block on the network by brute-forcing complex calculations, en masse.
While Bitcoin’s sheer computational force has been a hot topic for a while, the very nature of Bitcoin also has many sources documenting the network’s environmental footprint. As such, the transparency from this very documentation may be of benefit to the network.
To Leverton, the complex calculations that are available for everyone to see create a degree of transparency that is innate to Bitcoin mining itself, and doesn’t exist in the traditional financial system.
“It’s easy to see how much energy is used by Bitcoin miners because it’s publicly available information,” she said. “Whereas, you can’t see how much energy is used by the traditional fiat banking system or by hard metal mining.”
The Bitcoin Mining Council’s (BMC) latest quarterly report has found that around 60% of the power used by BMC members are sourced from sustainable sources – such as solar, wind, and hydro power. The BMC is composed of industry participants around the globe.
According to Leverton, the data from the BMC is incredibly relevant, noting that “it differs from other industries that aren’t transparent about their energy use.”
“We don’t talk about how much energy the gaming industry uses, as an example, or whether video games have value to the broader population,” she said. “We just accept that we know we assume that’s a lot of energy, but we don’t have a value debate about it.”
If other industries were more transparent with their power use, would they also be subject to the same scrutiny as Bitcoin?
Not to mention, those making the argument against Bitcoin’s energy consumption often make their case depending on whether they believe the token itself has any value at all.
Other technologies out there haven’t been critiqued the same way as Bitcoin – that is, the value over energy critique – and it overlooks the potential that Bitcoin has: from offering services to the unbanked, to giving financial freedom to those across the globe.
It’s about time that the Bitcoin mining narrative has to change, starting with pushing for transparency on how much power other sectors in the tech industry are also using.
