Bitcoin is ESG ESG IS NOT – Bitcoin Magazine
This is an opinion editorial by Mickey Koss, a West Point graduate with a degree in economics. He spent four years in the infantry before transferring to the finance corps.
The part
A common criticism of Bitcoin is that it uses too much energy, yet the ruling class wants everyone to drive an electric car. In 2020, California Governor Gavin Newsom even went so far as to pass an order to phase out sales of traditional gas vehicles by 2035.
Bitcoin using electricity is bad. Cars that use electricity are good. What gives?
The dirty little secret that not many people understand is that all this green technology isn’t really that green. A report by Seeking Alpha found that the carbon footprint of a Tesla battery would take almost three years to reach neutrality compared to a typical vehicle. Not to mention the hundreds of kilos of heavy metals refined from tens of thousands of kilos of raw material to make said batteries.
(Visual Capitalist)
Combine these with the source locations scattered around the globe…and it doesn’t look so hot to me.
Solar panels and wind turbines are not much better. Solar panels require coal to heat up and refine the silicon that makes them work. AEI estimates that it takes 79 solar workers to produce the same amount of energy as two natural gas workers and one coal worker.
Wind turbines can be massive, requiring an entire semi-truck to carry just one of the blades. Many are made of fiberglass, which precludes recycling. If recyclable at all, many people forget that it requires energy in the first place, which I thought was bad.
Anyway, with the way both energy systems work, there are tons of solar panels and tons of wind turbines. We need more coal people.
You would think that the carbon footprint would improve when we connect the carbon-free sources to the grid. Duke Energy of North Carolina says you’re wrong:
“Crawford provided measurements showing that even on sunny days – when solar energy is at maximum output – more NOx pollution is released into the air than would occur if no solar energy was used and natural gas was used instead.
“That’s because traditional power plants—including cleaner-burning natural gas plants—must scale back electrical output to accommodate solar energy flowing into the system when the sun rises, and flow back up when the sun sets and the solar energy dissipates. Starting and stopping reduces efficiency and disables emission control equipment, which increases pollution levels.”
The problem is that solar and wind are dependent on predictable base loads such as natural gas. If you run a natural gas power plant in stop-and-go traffic, you’re going to produce more things you don’t really like.
What we really need is something clean, reliable and predictable. Maybe something like… nuclear?
Bitcoin Out-ESG’s ESG
Bitcoin mining soaks up the surplus of unpredictable energy that these probabilistic systems produce, smoothing out demand curves and making these “zero carbon” green energy products economically viable.
It also prevents or slows rising energy costs for consumers. Each watt produced by additional energy sources (such as solar panels at home) means at best lost revenue for the utility company, if not direct loss if the large solar plants produce enough energy.
The effects are compounded.
Who puts solar panels on their roof? People who can afford it. Who does not? People who can’t.
With battery technology in its current state, people still need to be connected to the grid, which means that even with the solar panels, they are still dependent on utility companies.
With less income distributed over the same power demand, the energy companies will have to raise prices faster than they would have had to in the past. They have no choice, lest the solar mania put them out of business.
Who does this affect? Those who can least afford it – those who cannot afford solar panels.
Bitcoin also fixes this. It can help soak up excess supply from producers, allowing utilities to slow the growth in electricity prices.
Bitcoin incentivizes clean, abundant and cheap energy for all. Green energy stimulates mining and coal production. Bitcoin is ESG. ESG is not.
This is a guest post by Mickey Koss. Opinions expressed are entirely their own and do not necessarily reflect the opinions of BTC Inc. or Bitcoin Magazine.
