Bitcoin mining, is it sustainable or not? As Bitcoin is arguably the most decentralised protocol to ever exist, it is therefore unsurprising for it to come under attack from many antagonists. One of which is the traditional financial establishment, which views Bitcoin as a direct threat against their centralised, fiat-backed system. As Bitcoin requires no trust, it has the potential to disrupt this somewhat outdated system, leading to many in a position of authority to go on the offensive in the form of complaints and repression.
There is a worthy shortlist of critiques up for discussion whether it be cryptocurrency’s role in criminal activity, gambling in an unregulated market or simply being labelled “rat poison squared” by Charlie Munger. However, addressing mining renewability offers a different angle as it lies at the forefront of a contemporary global issue of tackling climate change. The seriousness of this has even led environmental businessman Elon Musk to U-turn his decision to accept Bitcoin payments from Tesla until it proved 50% renewability. Let’s delve into the facts.
Bitcoin ‘mining’ is the process of adding new Bitcoin into circulation, the method for confirming a transaction has been made as well as the main tool for maintaining the fluidity of the blockchain network. As Bitcoin is digital, there is no physical “mining” as such, however, the name stuck for its similarity in relation to retrieving Gold, Silver and other precious metals. Instead, the mining is done by advanced computers that aim to solve complex maths problems. All computers come together for validation (Proof of Work) and the first computer to find the solution is awarded bitcoin for their time and expense. The process then repeats endlessly
Gone are the days whereby Bitcoin could be comfortably mined on a computer. Today, to solve the complex hashing puzzle, mining requires significant computing power, which as a result expends tremendous amounts of electricity. For context, a Bitcoin mining rig that runs 24 hours a day consumes more power than the whole of Argentina, which is just a small fraction of the mining centre in Kazakhstan equipped to run 50,000 mining rigs. As we witness a growing demand for crypto mining, so does the amount of carbon and waste, adding to the issue of climate change. The trail this leaves behind causes the likes of Elon Musk to stay away for the time being.
The adage remains adapt or die, and this is true today for companies and even countries as everyone pledges to reverse the damage made on global warming. However, Bitcoin is front running this by continuing to do what it’s done since its inception 12 years ago, adapt. Its technological prowess has seen it create the lightning network, enabling transactions to be almost instant and for free. Likewise, it has discovered new ways of recycling electricity required for its mining such as from clean sources e.g. wind, hydropower and solar. El Salvador president, Nayib Bukele, views this as just the beginning and ultimately wants to use existing dams and volcanoes as their main sources for renewable energy in Bitcoin mining.
We must remind ourselves that we still live in a time of heavy fossil fuel consumption. A very low percentage of all cars on the road are electric and there still remains widescale oil drilling and power plants. As a Bitcoin advocate, Michael Saylor created The Bitcoin Mining Council and has since concluded in a report that current levels of mining renewability is at 56%. It is clear that Bitcoin isn’t the biggest problem facing climate change. On the contrary, it has proved to be over half renewable, whilst looking at new ways to become 100% renewable. This is more than can be said for most other industries in 2022. If the true objective is to become fully renewable in all walks of life, then Bitcoin should be encouraged and not dismissed altogether by political leaders.
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