How Bitcoin Mining Has Been Good for Our Planet
The most important innovations in human history are positively impacting the world in ways their inventors could never have foreseen. The printing press helped break the Catholic Church’s monopoly on thought. YouTube was originally intended to be a video-based dating site, but now over 120 million people worldwide use YouTube videos daily to learn about every topic known to man. And Satoshi Nakamoto’s 2008 Bitcoin white paper, while originally written to explain how decentralized and incorruptible money could work, has sparked a revolution in humanity’s relationship with energy that is underway before our eyes.
Nakomoto’s original intentions
The intentions of Nakamoto, the pseudonymous creator of Bitcoin, were made clear through his communications in cypherpunk mailing lists. As he wrote in 2011: “The root problem with conventional currency is all the trust required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is littered with breaches of that trust. The banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve.”
Nakamoto has succeeded in creating a trustless, digital alternative to fiat currencies. Since the release of the Bitcoin White Paper 14 years ago today, Bitcoin has already been bought and held by around 25 million people, and its underlying technology continues to make Bitcoin even more user-friendly. As of October 2022, one Bitcoin is worth over $19,000 – an increase of 21,203,200% from just $0.09 in 2010!
But Bitcoiners are quickly realizing that the Bitcoin network is good for much more than providing a solid global reserve. Bitcoin mining Part of Nakamoto’s dream turns out to be the solution to a number of energy-related problems facing humanity.
This seemingly never-ending increase in the Bitcoin network’s energy needs has sparked concern among environmental activists. But, perhaps contrary to conventional wisdom, Bitcoin mining is key to a healthier relationship with both Energy and the environment.
Bitcoin mining maintains clean energy
In April 2021, Jack Dorsey’s Square released a white paper boldly titled, “Bitcoin is the key to an abundant, clean energy future.”
It is notoriously challenging to match the supply of solar and wind energy with the demand. While the wind does not always blow and the sun does not always shine, society’s demand for energy is always equal to zero. To make renewable energies such as solar and wind profitable, something must pay for these sources’ excess energy when demand from society is low – and voluntarily not uses energy when demand is high.
With just a power source and an internet connection, Bitcoin miners can work from anywhere on earth. Furthermore, Bitcoin miners are perfectly able and willing to temporarily shut down their machines if the economics make it worthwhile. Bitcoin mining is unlike other activities that require constant activity to remain profitable (such as in a supply chain or restaurant).
Bitcoin mining’s ability to “subsidize” renewable energy sources that would otherwise be unprofitable is not just theoretical. In 2021, Argo Blockchain PLC and DMG Blockchain Solutions started the first ever green Bitcoin mining pool, and other pools are launching with the same mission.
Bitcoin mining mops up waste
Bitcoin miners are also able to use stranded energy sources that would otherwise become air pollution, such as waste methane.
Over a 100-year period, methane is 30 times more warming than carbon dioxide. Bitcoin mining is available technology only which can scale and reliably reduce humanity’s methane emissions.
Climate technology investor Daniel Batten calculated the effects of Bitcoin mining on the environment by taking into account its ability to reduce methane emissions. He has calculated that Bitcoin can be net carbon negative by 2025, can reduce methane emissions by 23%, and can help us eliminate 0.15°C of climate change by 2045. By using methane that would otherwise escape into the atmosphere, Bitcoin mining ultimately has a carbon-negative effect, and helps us avoid climate disasters.
Bitcoin mining’s ability to swallow humanity’s waste and spit out digital gold is not a dream, as there are already projects actively pursuing this model.
Not everyone is convinced
Despite the case presented here, many are still concerned about Bitcoin’s ever-increasing energy consumption. NBC recently reported that “Bitcoin’s greenhouse gas emissions are set to reach 48.4 million tons of carbon dioxide equivalent this year,” which many politicians consider a net negative. Furthermore, the Cambridge Bitcoin Electricity Consumption Index recently showed that Bitcoin’s renewable energy mix is indeed down since 2021, many cast doubt on how revolutionary Bitcoin can really be for our relationship with energy.
Regarding Bitcoin’s huge energy consumption: Yes, it is true that Bitcoin consumes large amounts of energy. But it does about the same thing everything — in fact, Christmas lights use more energy than the Bitcoin network, and yet no one is calling for holiday celebrations to be banned. The truth is that the most portable money ever invented that any person on the planet can use is worth the energy cost. If that wasn’t the case, people around the world, especially those affected by bad fiat economies, wouldn’t be flocking to Bitcoin in the first place. Also Bitcoin saving more energy than the current fiat system: the latter is the driving force behind the boom-and-bust cycle, which results in entrepreneurs wasting resources (including energy) in companies and projects that are doomed to fail.
Regarding Bitcoin’s short-term decline in renewable energy consumption: The Bitcoin network is still one of the greenest sectors in the global economy. Also, there are bound to be short-term fluctuations in Bitcoin’s renewable energy mix over time. Far more important are the fundamental reasons why Bitcoin is able to subsidize green energy and scaleably limit waste emissions, which remain theoretically sound and are proven in practice every day.
Better money for a better planet
Bitcoin mining’s potential to revolutionize our relationship with energy and the environment is the most exciting narrative currently developing in the Bitcoin world. Even the White House’s recent report on crypto acknowledges it: “While the EPA and the Department of the Interior have proposed new rules to reduce methane for oil and natural gas operations, mining cryptoassets that capture vented methane to produce electricity could yield positive results. results for the climate, by converting the potent methane into [carbon dioxide] during combustion … However, mining could potentially be more reliable and more efficient in converting methane to CO2.”
Messari’s recent Q3 2022 Bitcoin report included a staggering bar chart demonstrating Bitcoin mining’s sustainable energy mix (see Figure 1). This figure has risen from 37% in Q1 2021 to an almost incredible 60% by Q2 2022, making Bitcoin mining one of the most sustainable industries in the world.
The ideas in Satoshi Nakamoto’s white paper should be enough to earn Bitcoin a place in our pantheon of the greatest innovations in human history. After all, we have never had a global, permissionless monetary asset that cannot be inflated. But in addition to revolutionizing humanity’s relationship with money, Nakamoto’s innovation has ushered in a new revolution that the original article did not mention. Bitcoin mining subsidizes renewable energy projects, brings stranded energy sources far from civilization, and turns what would have been toxic and climate-change-inducing waste into digital gold.
