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Bitcoin Energy Use Myths Debunked

Bitcoin is most profitable when using cheap electricity. Electricity with a carbon footprint is rarely cheap enough for profitable mining, unless subsidized.

Bitcoin mining operations are typically located in remote areas that have an abundance of cheap energy, typically hydro, but are too remote for that electricity to be transmitted to distant cities. In other words, the electricity would be wasted otherwise which is why it’s so cheap. This is typical in remote regions of Canada, for example, where a hydro plant may have been developed to provide power for a remote community and its local industry such as an aluminum smelter or saw mill but produces power far in excess of what the grid it feeds can consume. I do not condone developing new hydro plants for the purpose of bitcoin mining.

Iceland is another major bitcoin mining centre. They primarily use geothermal power. The natural cold air is also used for the cooling mining rigs.

In the Ukraine they are moving forward with a plan to set up a massive bitcoin mining facility beside a nuclear power plant that has a massive amount of excess capacity. [https://news.bitcoin.com/ukraine-to-set-up-a-large-scale-crypto-mining-data-center-in-a-nuclear-power-plant/](https://news.bitcoin.com/ukraine-to-set-up-a-large-scale-crypto-mining-data-center-in-a-nuclear-power-plant/) I also do not condone the development of new nuclear plants for such mining, even though the latest generation nuclear plants are extremely safe and efficient with little waste.

Due to supply demand market forces, over time all bitcoin mining operations will naturally gravitate towards such power sources. As the capacity in these cheap and abundant clean energy regions continues to grow, the less cost effective mining operations will become elsewhere. I fully support a massive carbon tax for any mining operations that are not using clean energy. This will drastically speed up the natural migration towards clean and cheap energy regions.

People will argue that most bitcoin mining happens in China where the majority of power is generated by fossil fuels, and this may be true, but China also generates a massive amount of hydro, wind and nuclear power which are far most cost effective than fossil fuel generated power, so the the same market forces still apply to China. The hypocrisy is also palpable in the sense that half of the stuff we all own is made in China and that manufacturing is usually located near cities where the power is more likely to be coal generated, and for every unit of energy consumed by bitcoin mining in China about 100,000 units of energy are used by traditional manufacturing, yet I don’t see anybody lobbying their government for a carbon tariff on Chinese imports. Rather curious that dirty Chinese power only becomes an issue in the context of Bitcoin mining.

It should also be noted that precious metals mining, something bitcoin is also replacing, consumes far far more energy than bitcoin mining, and it’s rarely clean energy.

Blockchain technologies are trying to replace centralized finance which is a massively inefficient industry that dwarfs crypto in terms of energy consumption and that energy is far less likely to be clean. This is energy being consumed in areas where electricity is high demand, like cities.

Ask yourself who has the most to lose from blockchain decentralized finance replacing our current archaic centralized finance system? Then ask yourself who is paying for this smear campaign against bitcoin? Blockchain DeFi is a major threat to Wall Street and the global financial elites. Remember the 1% we’re all supposed to be trying to overthrow? Well, they are constantly looking for ways to take down bitcoin and this is their latest attempt. Turn it into an environmental issue. Get environmentalists and SJWs to take down bitcoin on their behalf. Oh the irony. The energy consumption anti-bitcoin narrative is full of misinformation and spin. If you have been manipulated into pushing this narrative on behalf of the global financial elite, you are helping them and hurting those trying to overthrow them.



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21 Comments

  1. People will find all kinds of denial and doubt to reject bitcoin. It’s hard to interact with them when they can’t understand personal experiences or how this impacts our world in the long run. Fortunately, people that do know me personally see first hand what its potential is. After we saw our free markets get dispelled in January, they understand now. There is a giant wall of FUD that people feel safe hiding behind. Patience will see the other side as an exodus into the future is already underway.

  2. Right now the Ukranian’s are building a massive mining operation because they have a nuclear power plant that is currently generating far more energy than can be consumed. This is a classic example of bitcoin mining finding a home beside cheap surplus electricity, with zero carbon footprint.

  3. Try this recent episode of The Breakdown… good info on energy use.

    **In today’s episode, NLW looks at how bitcoin fits with the growing trend of ESG (Environmental, Social, Governance) investing. In it, he:**

    * Argues that ESG investors should disregard the false idea that bitcoin is only used for crime
    * Provides three frameworks for understanding bitcoin’s energy consumption
    * Demonstrates how marginalized communities are using bitcoin as a tool of economic empowerment
    * Argues that bitcoin provides a new, networked alternative to corporate governance

    [https://www.coindesk.com/podcasts/coindesk-podcast-network/bitcoin-esg-investing](https://www.coindesk.com/podcasts/coindesk-podcast-network/bitcoin-esg-investing)

  4. I’ve noticed a trend in the articles “exposing” the environmental costs of bitcoin. In every single one I looked at they all glossed over the crucial fact that the rewarding of new bitcoin will cease at 21million bitcoin. After that, there will be no incentive for the high level of mining difficulty which has been pushed by competition and quickly growing GPU potential. After the final fractions of bitcoin are mined, whatever numbers they can spin will change completely.

    There’s a lot of spinning of facts too, for example , in the BBC article published today they referred to a 2017 report showing that bitcoin was twice as electricity expensive as mining gold. However, that was going off the price in 2017, before or after the crash or peak of price, the value of bitcoin today, and in the future, is higher than then, so already we are seeing that “fact” as no longer true.

  5. Employ a carbon tax and BTC miners will seek cheaper energy through renewables. Win win. The whole BTC/energy debate is trash. Miners are in a battle with energy bills, if you make fossil more expensive they will of course seek to lower their overhead to increase profits by seeking renewable energy that isn’t taxed as heavily. We should already be there to be honest.

  6. My understanding is the biggest bitcoin mining operations are in inner mongolia where electricity is dirt cheap. The area never developed but had the infrastructure in place.

    The environmental argument is silly IMO, but many seem to be taking it seriously.

  7. Wait. Isn’t the main point of Bitcoin to return to the use of sound money as a global standard?

    With sound money as a global standard, the world wide spread delusion that only increased spending and economic growth can keep our society alive will subside. Balance in a self regulating and free market where supply and demand once again provide a tested price for products and services can re-emerge. Incentivised consumption (1.9 trillion stimmy pkg, anyone?) can subside. This alone will recoup the impact of energy used for the Bitcoin network.

  8. If you think Bitcoin wastes more energy than moving REAL PHYSICAL dollars you need not comment. If you think that Bitcoin uses MORE electricity to mine or compute it’s myriad of transactions around the world then you need to HONESTLY go learn about how much energy is used RIGHT NOW – DAILY…. to transact the Fiat currencies in the billions of transactions today.

    It is simply a lie to say that using – tracking – mining – storing 1 digital currency costs more than another. FICTION. The real fact is that the lie was stirred up when they homed in on that fact that the miners watch their power consumption to maximize their profit margins…. NOT BECAUSE IT USES MORE ENERGY….. then you content but ASICS and GPU’s are running sooo hot and at top end speeds…. while this is true… all the miners combined do not equal 1/1000th the power consumption of the fiat currency computer power used daily to track and control your dumb ass.

    Can this lie be dead finally please for the love of all those little electrons we are killing to discuss said lie?

  9. You didn’t debunk anything here.
    How can you compare bitcoin to the whole finance sector, they are not even similar in scope, importance and usability?
    If anything you have to compare energy cost per transaction and there bitcoin is awfully, abysmally bad.

    And yeah it might be *most* cheap energy is renewable, but that doesn’t mean wasting energy is not a bad thing, just as putting millions of tons of fair trade and ecological food into the trash is still a bad thing.
    Not mention that even just counting the dirty energy usage, it’s still completely absurd for what bitcoin delivers.

  10. >Bitcoin and other crypto are trying to replace centralized finance which is a massively inefficient industry that dwarfs crypto in terms of energy usage and most of that energy is not clean energy.

    Okay but it’s not going to, like why do we keep pretending this pipe dream isn’t a pipe dream? Bitcoin right now is mostly just a way to invest but uses a shit ton of energy compared to most other ways of investing.

  11. I don’t know why we can not go proof of stake then no myths to debunk. Mining is not good for the environment. But neither is gold mining. But actually btc has something up its sleeve as well, and that is because it’s a deflationary currency means noone wants to spend it on environmentally unfriendly things.

  12. What about the e-waste produced by the older ASICs?

    ASIC=Application-specific integrated circuit, so all this specific hardware is not usefull for other thing than mining bitcoin.

    I don’t want to bash bitcoin, only curious what do you thing about that.

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