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Does the environmental cost of mining Bitcoin outweigh the financial gain?
According to Digiconomist’s Bitcoin Energy Consumption Index, as of Monday November 20th, 2017 Bitcoin’s current estimated annual electricity consumption stands at 29.05TWh. That's more than the county of Ireland and many African nations use in a year but is it worth it?
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Digiconomist (Alex de Vries) is not a reliable source. He's an activist with no previous expertise in energy markets, who quotes his own work, based on estimates of miners' profitability, as if it's scientific research. Other research compared Bitcoin mining with metal mining, which is only the first step in producing and transporting usable metal products.

Experts are skeptical: "It is a tiny, tiny part of all data center electricity use," said Jonathan Koomey to CNBC in December 2017, when he was a lecturer in Earth Systems at Stanford University. He also warned against extrapolating growth figures into the future.

"The reports of bitcoin environmental damage are garbage" is the title of a detailed analysis by Robert Sharratt, who modeled electricity systems in China when he was an investment banker (posted on Medium, 29 January 2019).

Let's add some quotes from Bitcoiners (not energy experts):

"Bitcoin’s energy use has and will continue to catalyse the exploitation of otherwise unviable, nongrid energy assets. These are sources of energy that wouldn’t otherwise be used". - Nic Carter, 13 October 2018 on Twitter.

"Bitcoin mining, in its 10 years of existence, consumed as much energy as US cars do in 3 days." Antoine Le Calvez, 11 April 2019, on Twitter.

"We show that Bitcoin mining is mainly located in global regions where there are large, unused supplies of renewable electricity available... making Bitcoin mining greener than almost every other large-scale industry in the world". Coinshares whitepaper, The Bitcoin Mining Network, 26 November 2018.

More than any other industry, Bitcoin mining goes to where energy is cheap and plentiful. Transporting electricity is expensive, while sending information across the world is cheap. This makes it possible to mine Bitcoin profitably in mountainous areas where hydro dams produce electricity, while heavy industry that could use it is far away. Some of these areas are the Chinese province of Sichuan, the Pacific Northwest in the US and the country of Georgia in the Caucasus. There could be more mining farms in the Canadian province of Québec if the Hydro Québec monopoly wasn't so conservative. Iceland has both geothermal energy and a cool climate that lowers the ventilation cost.

During the dry season in Sichuan, Chinese miners move their ASICs to coalmining regions. This is one of the factors that makes it hard to estimate the share of renewable energy. There are Bitcoin mining projects exploiting the natural gas that would otherwise be flared off in remote oilfields in North America, but more could be done in that area. One downside for energy networks is that mining farms do require some infrastructure, like substations, while they could disappear next year.

It will be interesting to see whether solar energy catches on. It will be the cheapest source of energy in the future, but it would need to be combined with high-capacity electricity storage. Crypto mining farms need to run 24/7, in order to recoup the investment before the equipment is outdated. And cooling will be expensive in the regions where the sun shines bright every day.

I'm not an expert, but I wonder whether cryptocurrency mining will cost more energy than the alternative. What's the highest skyscraper in the nearest business district? For many readers, the answer will be the headquarters of a bank, or a building shared between financial institutions.

Even if proof of work is better than the banking system, it would still be an improvement if it could be replaced by proof of stake with the same level of security.

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The way bitcoin is generated is not very cost effective, but that's the whole point of it. Something is valuable when it's hard to get. If you would airdrop bitcoins on people and make the total supply more then you just devalue the currency. 

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