Opinion Bitcoin’s green problem could pose an existential threat By Andrew Ross Sorkin March 10, 2021 — 7.45am https://www.smh.com.au/business/mar...se-an-existential-threat-20210310-p57995.html “Bitcoin uses more electricity per transaction than any other method known to mankind, and so it’s not a great climate thing.” That was what Bill Gates recently told me. At a time when companies and investors increasingly say they are focused on climate and sustainability issues, some of them may be about to collide with the reality of another financial trend, one currently worth about $US1 trillion ($1.3 trillion): bitcoin. The cryptocurrency has become inescapable, with big companies like Tesla and individual investors alike rushing to stock up on the digital token. But depending on which study you read, the annual carbon emissions from the electricity required to mine bitcoin and process its transactions are equal to the amount emitted by all of New Zealand. Or Argentina. To put this into perspective, one bitcoin transaction is the “equivalent to the carbon footprint of 735,121 Visa transactions or 55,280 hours of watching YouTube,” according to Digiconomist, which created what it calls a bitcoin Energy Consumption Index. (Critics of this comparison point out that the average bitcoin transaction is worth about $US16,000, while the average Visa transaction is worth $US46.37, but you get the point.) And as bitcoin becomes more popular, the more resources its ecosystem consumes. What is happening, in a nutshell: So-called miners verify transactions involving the cryptocurrency by using computers to solve increasingly complex mathematical equations. They earn bitcoins for their work, meaning that the more popular the currency becomes, the more competition there is to mine new tokens. “As the resource intensity of running bitcoin has increased over recent years, it has become a serious concern for its potential impact on health and climate,” Alex de Vries, a data scientist who put the index together, wrote in the journal Energy Research & Social Science. . How would its bitcoin holdings affect its sustainability score? Other companies are also considering whether to add bitcoin to their balance sheets. And financial firms like Guggenheim Partners have already invested in bitcoin while Bank of New York Mellon says it will start financing bitcoin transactions. As bitcoin becomes more mainstream, its environmental impact could pose a problem for investors. Even Fink’s BlackRock has started to, in the words of a senior executive, “dabble” in the cryptocurrency by potentially allowing two of its funds to invest in bitcoin futures. Rick Rieder, the firm’s chief investment officer of fixed income, cited investors’ interest in the asset and its increasing adoption by younger, tech-savvy customers. So far, bitcoin’s carbon problem hasn’t slowed down its price, which is hovering around $US50,000 for a token, up from about $US8,000 a year ago. Several companies are working on some counter-intuitive ideas to turn bitcoin green. On Monday, Seetee, an investment company involved in cryptocurrency, said it planned to invest in bitcoin “mining operations that transfer stranded or intermittent electricity without stable demand locally — wind, solar, hydro power — to economic assets that can be used anywhere.” In other words, the company plans to build wind and solar in places that might not be perfectly situated for the technology and will use the extra power to mine bitcoin, making money in the process. “bitcoin is, in our eyes, a load-balancing economic battery, and batteries are essential to the energy transition required to reach the targets of the Paris agreement,” the company said in its announcement. There are also new ways to conduct greener bitcoin transactions. For example, users could batch transactions on something called a Lightning Network, essentially a payment channel between two users that would use less power to process transactions. PayPal, too, argues that those new protocols may change bitcoin’s carbon footprint: “Not only are we assessing the climate impact of cryptocurrency, which is concentrated on bitcoin, but also the entire industry is evolving in the assessment and measurement standards of the potential environmental impacts and more energy-efficient protocols are emerging.” In the near term, nearly two-thirds of all bitcoin mining is taking place in China, and “mining activities can also be found in regions with coal-heavy power generation, such as in the province of Inner Mongolia,” according to a study in the scientific journal Joule, which also raises the idea of imposing a carbon tax. “Regulating this largely gambling-driven source of carbon emissions appears to be a simple means to contribute to decarbonising the economy.” As for Fink of BlackRock, he said he was still sceptical of the entire idea of bitcoin, before he can even contemplate the climate issues. “We are watching it,” he said. “Right now I’m more focused on efficacy.”
The people buying BTC don't give a s*** about the environment. They only care about making money. Elon Musk who has received billions in green energy tax credits and subsidies put $1.5B of Tesla into it. He knows about the environmental impact...doesn't care. Even Kevin O'Leary who recently went on Stansberry Research's Youtube channel to state that he doesn't own any Chevron because he's concerned about the environment impact recently bought bitcoin. He tried to justify it by saying that he would only own coins which were mined responsibly, but he doesn't seem to understand that, as the Bitcoin proponents point out, his coins rely on the entire Bitcoin infrastructure (and required power consumption in the present and future) to have any value. There's no way to separate out and not benefit from the dirty parts. It's like designating a certain area of a swimming pool as the pissing area and claiming the rest is clean. I thought Kevin was a reasonable and logical guy, but he really made a fool out of himself with his illogical justification. If he just admitted that he's buying it because he thinks it's going higher, no problem and I would not have lost any respect for him. I found this interesting: "China’s Inner Mongolia has banned cryptocurrency mining and declared it will shut all such projects by April, spurring fears the world’s No. 2 economy will take more steps to eradicate the power-hungry practice." https://www.bnnbloomberg.ca/bitcoin-rises-after-china-region-declares-war-on-crypto-mining-1.1570252
Bitcoin's estimated electricity consumption has increased 30-fold in the past 5 years. (Roughly doubling every year) Source: https://cbeci.org The current estimated annual consumption of around 120TWh is about 0.5% of total worldwide electricity consumption. If it keeps increasing at the current rate, do the math.
This topic has been beaten to death. As a matter of fact, mining for the most part need cheap energy to be profitable so most of it is used either from excess electricity that's usually sold at a loss. Look at this: https://www.seetee.io/static/shareholder_letter-6ae7e85717c28831bf1c0eca1d632722.pdf Quote: "Second, Seetee will establish mining operations that transfer stranded or intermittent electricity without stable demand locally—wind, solar, hydro power— to economic assets that can be used anywhere. Bitcoin is, in our eyes, a load-balancing economic battery, and batteries are essential to the energy transition required to reach the targets of the Paris Agreement" All this "Bitcoin will kill the environment with it's energy consumption" is pure BS.
Looks like the establishment is going hard on the energy use FUD. But it's a conversation they really don't want to have because it can't stop at Bitcoin's energy usage, it has to continue so the conversation will then have to move on to other massive uses of energy in relation to what they offer human kind and are they worth it. The first one I'd start with is the US military's use of energy (largest user in the world) and if the country/world gets value for that? Taking note of just how much death and destruction the US has caused the world over the last 40+ years with basically negative results. The War on Terror for example has cost trillions and it looks like the world is much unsafer than before it started. How much energy has that used? How much will it continue to use? Is that a good use of energy when it has a) clearly failed, and b) impossible to determine if the 'war' can ever be won. Once that's done we'll then move on to the inflationary economies that the establishment fawns over - the need for growth at all costs. The need for growth is no different to the need for ever more energy to power that growth. Is the average citizen is getting value from that? I don't think so as standards of living have collapsed for the middle class and below over the last several decades. Note that in the above 2 examples, the elites have got very rich and are getting ever richer. The Military industrial economy spits off massive amounts of cash for a small group of companies and people. Same with the inflationary policies, small groups are making billions. So all that extra and excess energy use has been great for them but it hasn't been great for the 90%+. By all means go hard on Bitcoin's energy use, but I wouldn't push it too far if I were the Elites because you'll be forcing people to start questioning energy usage in a MUCH wider scale and that will put trillions of USD in profits and power at risk...
What about Ronaldo? Ronaldo has 163 Million followers on Instagram, in fact his is the largest Instagram account in the world, and the energy needed for his followers to visualise every single photo he posts is estimated at 24 MWh, which is again something around 5 to 6 years electricity consumption of a UK household. Are we humans getting value from all that energy usage? And he's just one man. Imagine if we take all the dopey celebs, posting photos about their new haircut? Then let's look at how much energy all the replies to those posts from fans use. So why pick on just Bitcoin? Why not go after celebs and selfies? Imagine how many selfies are taken just per day? 7.5billion people in the world so I'd estimate at least 500 million photos are uploaded EVERY day (not just selfies), and maybe a hell of a lot more. So why do the "Bitcoin's boiling the oceans" mob not seem to care about anything else that uses wasteful energy? I'll tell you why, because 90% of them cannot think for themselves so take most of their talking points from the media/twitter. Bitcoin is going to kill everyone is what they're told, it's a great fearful story, full of emotion so they run with it. Also, 99% of that mob probably do jack shit about THEIR personal energy use, ie they don't want to dramatically lower their standard of living in order to help save the world. Far easier to whinge and whine about it online, which of course is a complete waste of energy...
Because it is almost worthless waste of energy? With a selfie at least you make some people happy. BTC at this point is just numbers on computers. If you want to make yourself happy, buy GME.
Small things please small minds Pek You might prefer a dopey selfie, many others would prefer a long BTC position... However, you make a good point. Do we humans want to be happy or miserable. Happy = higher usage of energy Unhappy = Far, far lower. Happy/unhappy is probably the wrong word nevertheless there's a perfect equation that states that countries which use higher amounts of energy have far higher standards of living than countries that use lower amounts. USA versus The Ivory Coast is a great example. Ultimately, if people want to save the world, rather than just talk about it, start doing something about it and lower your standard of living by at least 50%. No tv, mobile, car, heating/air, no holidays, no junk food, no eating out, no christmas tree lights, no parties given, not a lot actually, in fact, why not emigrate to the Ivory Coast...
Also, if you talk to scientists/engineers in charge of doing something about climate change, many are furious because they're not getting any credit for the wonderful work they've been doing. The media is full of 'we've only got 10 years left' type stories (again, use the 'fear' and emotions of your readers). But the reality is we're making GREAT strides in sorting the problem(s) out. Overall the numbers are starting to look a lot better and there's some real light at the end of the tunnel. Yes, there's a tonne more work to do but the scientists/engineers are getting zero credit for the media because bad news outsells and out-clicks mildly good and positive news...