The debate on Bitcoin’s mining energy consumption doesn’t seem to be ending any time soon.
Elizabeth Warren, the Massachusetts US senator has joined the conversation, saying that one of the easiest and least disruptive things “we can do” to fight the Climate Crisis is to crack down on “environmentally wasteful” decentralized cryptocurrencies like Bitcoin. She says cryptocurrencies like Bitcoin are “terrible for the environment” regardless of whether they generate any benefits or not, adding that the fact that we are not getting any benefits, “makes it even more scandalous.”
“One Bitcoin transaction, a single Bitcoin purchase, sale or transfer uses the same amount of electricity as the typical US household uses in more than a month,” said the senator.
Warren gave her remarks during a Senate Banking Subcommittee hearing which is exploring the possibility of establishing a central bank digital currency. According to her, a central bank digital currency can solve the growing problem of many people – about 33 million Americans being locked out of traditional banking institutions and the ever-expensive banking systems in the United States.
She wondered whether the United States should continue to allow “more and more Bitcoin miners to continue to use useless complicated math problem that consumes a larger and larger share of the world’s energy for the next 100 years until the last coin is mined.”
Twitter CEO Jack Dorsey, has, however, defended Bitcoin saying if Warren and the Congress are serious about shifting power from banks and corporations back to the people globally, and help the 33 million who are unbanked in the country, then the mining “math is critical.”
It is much likely that a centralized digital currency will result in the same banking limitations and excessive banking costs to people as the fiat system.
Bitcoin Mining With Renewable Energy
Riot Blockchain CEO Jason Les has also backed Bitcoin mining, calling it a “noble use” of energy even as the Bitcoin Mining Council started this week. He said the story that needs to be told is that you find low-cost energy everywhere when there is an excessive surplus of it and that Bitcoin miners buy renewable energy from sources that do not have buyers, and this happens everywhere.
“Most Bitcoin miners are using more renewable energy than any other industry on average,” he said. “76% of Bitcoin miners utilize renewable energy in their mix-up. About 40% of global Bitcoin mining is powered strictly by renewable energy.”
According to Les, Bitcoin mining consumes less than a tenth percentage of the world’s energy, and in doing so, it creates an open and free financial system. It is a very noble use of that energy. He said it consumes “a lot less energy than gold mining.” Besides, many establishments are exploring the use of renewable energy.
The discussion is a growing debate over the amount of energy used in Bitcoin and cryptocurrencies, especially after Elon Musk said that Bitcoin mining is energy destructive.
The so-called “solving of complicated math” in mining is done to verify all Bitcoin transactions while securing the network. It involves the use of multiple computers that run the Bitcoin blockchain. These multiple nodes spread around the world have to keep a copy of the blockchain in their computer and connected, to mine Bitcoins. The result is the creation of a Bitcoin while securing the network from hacks, but also facilitating a decentralized economy in which everyone can participate. So many have been tempted to mine the cryptocurrency of late given its surge in price because a miner wins a Bitcoin or a share of it in a pool mining.
A Growing Problem Of Unbanked Americans
It should be obvious that the case for a central bank digital currency should be built by comparing it with decentralized cryptocurrencies like Bitcoin. Warren’s comments are also no surprise as the committee already seems to support the establishment of a central digital currency.
Warren is in support of a central bank-backed currency to answer to the growing problem of the “unbanked” and banking fees in the United States while not exacerbating the climate crisis by using an excessive amount of energy.
“Nearly 33 million Americans have been locked out of the traditional banking system,” she said. “More has been gouged with unnecessary fees by the big banks. A central bank digital currency could bring more households into the banking system so everyone has access to the services they need.”
According to Warren, the benefits of decentralized cryptocurrencies do not outwear the costs, especially for countries like the United States where the benefits are largely illusory. She says Congress needed to act otherwise, otherwise, the growing group of people wanting to move to decentralized ledgers will lead to more wasted energy.