ZoneBitcoin EditorialBitcoin, the revolutionary digital currency, has become a global phenomenon, sparking both enthusiasm and controversy. Hailed as a major technological advancement in digital payments, Bitcoin offers the promise of financial decentralization, enhanced security, and increased privacy for its users. It has the potential to disrupt traditional financial systems, make international transactions faster and cheaper, and provide access to financial services to millions of unbanked people around the world.
However, behind this promising financial innovation lies a growing concern about the environmental impact of Bitcoin.
Its mode of operation based on blockchain technology and proof of work generates massive energy consumption. The Bitcoin mining process, which requires powerful computers to secure transactions, results in exponential demand for electricity.
Studies with different results then surface and campaigns like that of Greenpeace urges the community to change Bitcoin’s code.
In this article, we use the complex triad of “Good, Bad, and Ugly” to ask crucial questions about Bitcoin’s sustainability and environmental impact. We will explore these different facets of Bitcoin’s pollution and examine the challenges that lie ahead for this cryptocurrency to truly play a positive role in a sustainable future.
Chapter 1/ The good
Bitcoin, the digital currency that has taken the financial world by storm, is often acclaimed for its promise of decentralization, enhanced security, and increased privacy for users. Indeed, Bitcoin has the potential to disrupt traditional financial systems, making international transactions faster, less expensive and providing financial accessibility to unbanked populations.
One of the main characteristics of Bitcoin that qualifies it as “the Good” is its decentralized operation based on blockchain technology. This lack of central authority allows users to engage in financial transactions without the intermediary of banks or governments, which can reduce the fees and delays associated with traditional money transfers.
Additionally, Bitcoin is often touted for its enhanced security thanks to sophisticated cryptography that protects transactions and ensures data integrity. This increased security can be particularly attractive to individuals and businesses looking to protect against fraud and hacks.
As a potential “Good” for financial inclusion, Bitcoin can play a crucial role in providing financial services to millions of people around the world who lack access to traditional banks. This accessibility can open up new economic opportunities for marginalized populations and developing countries.
However, despite these advantages, Bitcoin faces a serious concern that tarnishes its image as “Good”. Its mode of operation requires colossal energy consumption, which has major environmental repercussions.
Recent studies have shown that the Bitcoin mining process requires a massive amount of electricity, sometimes rivaling the energy consumption of some countries. This intensive mining is linked to the concept of proof of work, which requires powerful computers to solve complex mathematical problems and secure transactions.
Unfortunately, many Bitcoin miners are turning to non-renewable energy sources, such as coal, to power their operations. This dependence on fossil fuels leads to a significant increase in CO2 emissions and has devastating consequences for the environment. Bitcoin has thus become a controversial player in the climate change debate, because its carbon emissions can contribute to global warming.
Given this reality, Bitcoin faces a significant challenge in truly becoming the “Good” it claims to be. Bitcoin advocates continue to look for ways to reduce its carbon footprint, exploring alternatives such as Proof of Stake, which requires less energy. However, the path to environmental sustainability for Bitcoin remains fraught with challenges.
In short, Bitcoin embodies a double face – that of “Good” which promises a positive financial transformation and that of environmental controversy due to its massive energy consumption.
Chapter 2/ The Brute
The Brute in the history of Bitcoin pollution is represented by the colossal energy consumption of the network. Bitcoin mining requires powerful computers to solve complex mathematical problems and secure transactions. These energy-intensive calculations lead to an exponential increase in electricity demand, which incentivizes miners to seek cheap and accessible energy sources.
Unfortunately, many Bitcoin miners are turning to fossil fuels, such as coal, to power their operations. These energy sources have a devastating impact on the environment, releasing significant amounts of CO2 into the atmosphere and thus contributing to global warming. Indeed, some reports estimate that Bitcoin mining emits as much CO2 as some entire countries.
This massive carbon footprint has many environmentalists questioning the viability of Bitcoin as a sustainable monetary system, given its negative impact on the climate.
You should know that there are several studies with figures that are considered approximate by some experts. The two major studies published are that of the University of Cambridge, which is called “ Bitcoin Electricity Consumption Index (CBECI) ». This gives a real-time estimate, updated every 24 hours, of the total consumption of the bitcoin network.
High electricity consumption like many other industries
In reality, it is important to recognize that Bitcoin is not the only culprit when it comes to digital pollution. Many other traditional industries and financial systems also have a considerable carbon footprint. Data centers, social networks, streaming services, and even traditional banking institutions all require a significant amount of energy to operate efficiently. For example, the servers powering web giants consume a gigantic amount of electricity to store and process user data around the world.
In the traditional financial sector, banks and global payment systems rely on complex infrastructures that also consume significant amounts of energy. ATMs, payment terminals, and online banking all contribute to this energy consumption.
In comparison, although Bitcoin has a significant carbon footprint due to its proof-of-work based mode of operation, it is important to keep in mind that other sectors of the digital and financial economy also have significant environmental effects. The extraction of precious metals including gold represent industries with significant negative externalities.
Thus, to address the challenge of digital pollution comprehensively, it is essential to consider all aspects of our digital economy and collectively seek solutions. durable solutions to reduce our impact on the environment.
Read the article : Here are the different ecological innovations used by bitcoin miners
Chapter 3: The fake gangster
While Bitcoin mining has long been criticized for its massive energy consumption, it appears that significant progress is being made to make this activity more environmentally friendly.
More and more Bitcoin miners are becoming aware of the environmental impact of their activity and are actively seeking to adopt more sustainable practices. The Bitcoin community is exploring innovative solutions to make mining greener and relying on renewable energy to power their operations.
Indeed, some miners have turned to renewable energy sources such as solar, wind and hydroelectric power to power their mining farms. By exploiting these clean energies, they seek to reduce their carbon footprint and contribute positively to the transition towards a more environmentally friendly economy, even if it seems counter intuitive at first sight.
Read the article : Bitcoin is a “counterintuitive” solution that serves the ecological cause
Pilot projects and community initiatives have been launched to encourage the use of renewable energy in the Bitcoin mining sector. For example, some mining companies have moved their operations to geographic regions where renewable energy is more abundant, thereby taking advantage of available clean electricity.
At the same time, technological innovations are being developed to improve the energy efficiency of Bitcoin mining. The Bitcoin mining sector is therefore evolving towards a greener landscape, where sustainable practices and responsible energy choices are increasingly taken into consideration.
The pollution of Bitcoin has pushed miners to innovate and use ever more ecological solutions. Bitcoin miners are becoming aware of their environmental responsibility and are using renewable energies at more than 60% according to the Bitcoin Mining Council.
However, it is important to remain realistic and critical in this development. While progress is being made, broader adoption of renewable energy and sustainable practices in Bitcoin mining is still needed to have a significant impact on reducing the cryptocurrency's carbon footprint.
However, the Bitcoin industry must continue to innovate and act proactively for mining to become truly green and contribute to a more sustainable future for the cryptocurrency and the environment.
Final reflections
And maybe you're saying to yourself, why not switch to proof of stake for bitcoin? This seems at first glance the perfect solution, after all Ethereum does it right? And, would that solve the problem of Bitcoin pollution once and for all?
In fact, the answer is more difficult. Already, miners would have to accept such a change and all the equipment they purchased (we are talking about a very large investment) would have to be abandoned, while the return is still possible. We would also have to give up somewhat on the enormous security of the bitcoin network to move to POS which is less technically so.
However, the ecological question remains a real issue on which bitcoin supporters are working. The pollution of bitcoin is then a leitmotif.
For example, we proposed the “ Lighting Network »; which is a layer 2 (additional layer) which will allow transactions to be carried out outside the bitcoin blockchain. This improves the speed and cost of transactions but let it be said that it is still in development. This could still greatly disrupt the main blockchain, but hey, like any change (we can think of the big debates that the Segwit change sparked, for example), there are always those who resist, especially since this would also bring its share technical debt….
Bitcoin pollution should not be stigmatized or demonized. There must be in-depth scientific and political work for a cause that is incumbent upon us all.
For further :
- Bitcoin is a “counterintuitive” solution that serves the ecological cause
- The most important truth to know about bitcoin mining, energy and the environment
- Watch the video on pollution of bitcoin: debunking
- How Bitcoin Mining Helps Oil Companies Reduce Their Environmental Impact?
Disclaimer: The opinions published here do not represent investment advice. The opinions of the editors do not constitute the opinions of ZoneBitcoin journal. Always do your own research before making your opinions, especially when it comes to investment.
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Hello Inès,
Good article as usual but perhaps a little too biased (sorry!).
I'm going to kick the doors open, I've been investing in cryptos for a while now and so I'm not going to "blast" for the sake of it, I'm up to my neck in it! That shouldn't force me to only see positive points just because I invested in it.
Let's start with the "estimate" of consumption which can be done using the available data. on the web such as daily hashrate/s (https://bitinfocharts.com/comparison/bitcoin-hashrate.html) and the hash capacity of the most efficient machine of the moment (Antminer S19j / 90TH/s).
To facilitate conversions, to go from Tera to Exa, you must add 6 zeros (https://www.cio-online.com/actualites/lire-comprendre-les-tera-peta-et-au-dela-1675.html).
We therefore have on one hand a daily hashrate so the peak reached the equivalent of 171.000.000 TeraHash/s (171 ExaHash/s on May 13, 2021) and on the other hand the most efficient machine which is capable of providing 90 TeraHash/s therefore (171.000.000/90)/24 hours=79.166 miners assuming that all miners reach 90TH/s and operate 24/24.
The consumption given by the manufacturer for this miner model is 3.100 w/h to be multiplied by 79.166, which gives 245.414.600 Kw/h over 1 single day. To give an idea, consumption. average daily consumption of a French household is 12,5 Kw/h, that is to say that in the case of this peak, consumption reached the equivalent of the consumption of 19.633.168 French households (out of 1 day) or 7.418.821 American households (over the same period), then everyone estimates whether they think it is a lot or a little and obviously, the hashrate fluctuates and has since gone down but when we look at the evolution over Over the past 18 months, the average hashrate/s has increased 4x and is expected to increase similarly in the future. This is also relatively consistent with an old article from bitcoin.fr (https://bitcoin.fr/la-depense-electrique-des-crypto-monnaies/) and who is already almost 4 years old.
Then, the argument that often comes up is to compare the energy consumption of bitcoin with the consumption of other industries and this is at best a bad argument for several reasons:
– It’s a bit basic, it amounts to saying “yes but he started it”, that doesn’t advance the schmilblick and the bad practice of one industry cannot justify the fact that another do the same thing.
– Precious metals (gold, silver, aluminum, platinum) do not only have market value, they are also used in industry (https://www.cafedelabourse.com/dossiers/article/or-industrie / https://ceal-aluquebec.com/transport-terrestre/) and without them we would return to before the industrial revolution (no electricity, no transport planes, trains, cars, no major food industries, etc.)
– Each kilowatt consumed was actually used to obtain the raw material concerned, bitcoin has chosen to ensure that a block is mined every 10 minutes but it must be taken into account that almost all of the effort provided only serves to solve a deliberately complicated calculation to achieve these famous 10 minutes.
– Most metals are recyclable for life and have a direct impact in the real world
On the solutions side we could have:
– That all industries above x energy consumption should have the obligation to provide renewable energy (which is partially the case but undermined, no pun intended, by carbon quotas, https://www.ecologie.gouv.fr/marches-du-carbone)
– But it is difficult to do because all countries would have to participate to play on an equal footing
– That these famous 10 minutes of computational frenzy serve rather to advance science and the one who participates the most wins the basket (shift in the use of energy)
I suspect that I am not going to make only friends with all this but I think that we must know how to remain critical and not only find virtues in what interests us closely, the problem is real and looking elsewhere is not going to help. not solve it.
If we consider that the Cambridge study was carried out within academic rules and is therefore relatively reliable, the annual consumption of bitcoin, if it were a country, ranks it at rank No. 35 by consumption (https://www.wikiwand.com/fr/Liste_de_pays_par_consommation_d%27%C3%A9lectricit%C3%A9).
Even if we ignore the total consumption, what I find the most insane is the consumption per miner which normally runs 24/24.
To end on a happier note, electricity production is not intended to remain nuclear and/or fossil fuel indefinitely, it could be a good idea to invest a fraction of our precious bitcoins in startups that are launching into production of renewable energy and in this case we could really say that we will have participated in changing the world.