A wrong step towards sustainability

All cryptocurrencies that adopt Proof of Work methodology as a consensus mechanism to verify virtual currency exchanges have been severely attacked by the scientific world. Indeed, in recent months, many articles have been published about the terrible environmental impact it generates.

Through a detailed analysis of this peak in electricity consumption, which is the same as in a country like Sweden, we see that the higher the value of the cryptocurrency, the higher the peak consumption. For this reason, the first virtual currency to be criticized was Bitcoin.

With China shifting to more environmentally conscious policies last year, cryptocurrency miners have migrated on a large scale and this makes us understand how The work of miners is determined by two factors: environmental policies and the cost of electricity required to operate cryptocurrency mines.

How does Bitcoin respond to the scientific community? Bitcoin certainly does not choose to change the consensus mechanism towards Proof of Stake, as Etherem does, However, according to the Bitcoin Mining Council, it is taking small steps towards increasing the use of renewable energy…but how reliable is this data?

Bitcoin and Sustainability: The Media Attack

A few months ago, Bitcoin received a media attack from different fronts: First of all, Tesla was a voice Elon Musk, who publicly announced a year ago that he no longer wants to receive bitcoins So their environmental impact is reduced.

Within hours of its announcement, Bitcoin shares fell 14%. But in fact, as Infobae writes, the relationship between Bitcoin and Elon Musk has been a “love-hate affair” since Mr. Musk retaliated after the announcement last year.

Other opponents are not resilient, for example Sweden remains one of the most active countries against banning bitcoin trading. Pressure reached the European Parliament, which eventually decided not to agree to a ban on digital currencies that use Proof of Work as a consensus mechanism.

Greenpeace’s Environmental Working Group (EWG) campaign has also been supported by many other NGOs and she has He contributed to the influx of propaganda media regarding environmental pollution and the unsustainability of Bitcoin.

Bitcoin and Sustainability: The Great Migration

Bitcoin has been around for 14 years now. Why have environmentalists moved only now? Why even before the pandemic, according to a study by crypto-analytics firm CoinShares, In 2019, at least 74% of global bitcoin energy consumption came from renewable sources.

Most of the bitcoin miners are located in China, where China’s low-cost hydroelectric power has been exploited. This does not mean that the environmental impact has been reduced to zero, but that the ecological footprint is certainly much less significant than the use of fossil fuels.

Since last year, when China said it wanted to strengthen its environmental policy, Many cryptocurrency miners have had to migrate because the costs have become unsustainable. And here comes the problem because the solution was to go to countries with bad environmental policies and where electricity is cheap.

Bitcoin and Sustainability: Why Talk About Environmental Impact

Both the concept of cryptocurrencies and the Proof of Work consensus mechanism guarantee a number of benefits and this is undeniable. In fact, the only point under discussion regarding sustainability is How Bitcoin works, indirectly pushes miners to look for “convenient solutions”.

In fact, the competition for the reward, because we are talking about large numbers, to decipher complex mathematical calculations, It pushes miners to buy fast, powerful supercomputers that consume electricity on an equal footing with entire countries.

A large source of energy is used to cool the components, which is why We find giant mines in the coldest places in the world, even in the Arctic Circle. In this video from Bloomberg Quicktake: You can now get an idea of ​​what a Siberian bitcoin mine looks like.

Bitcoin and Sustainability: Using Renewable Energy

One of the most straightforward facts to watch for Bitcoin trend is The Blockchain Mining Council (BMC), is a voluntary and open forum for Bitcoin miners involved in the network and its core principles where transparency is promoted and mining best practices are shared.

According to Forbes, from a recent report from the Blockchain Mining Council, Bitcoin mining has moved rapidly away from a non-renewable resource since last year. But:

The cryptocurrency mining industry has adopted a greener and more sustainable energy source and has been recording in recent months 59% year-over-year increase in its bitcoin mining use And secure the largest blockchain for cryptocurrency.

That data Represents the fact that 44 bitcoin mining companies claim to be:

It represents half of the current mining facilities of the global Bitcoin network. The group is led by Michael Saylor, CEO of Bitcoin Maximalist and Microstrategy.

Bitcoin and Sustainability: What are Bitcoin Green Mines

According to Forbes, from the survey on energy consumption, and the percentage of renewable energy used, BMC states that:

Green Energy Mix for Global Bitcoin Mining Industry It reached 58.4% in the first quarter of 2022, down marginally by 0.1% from the previous quarter. The growth is significant compared to the estimated figure of 36.8% in the first quarter of 2021.

The report also shows an increase in the energy efficiency of these mining operations. While Electricity consumption fell 25% in the past year, and the retail rate increased by 23%, from 164.9 to 202.1. This shows an efficiency increase of 63 percent over last year and 5814 percent over eight years.

Bitcoin is slowly returning to the same percentages of renewable energy it used before the pandemic but we have to say that Its exponential growth does not help. The required energy consumption is increasing and it is not easy to make ends meet.

Bitcoin and Sustainability: BMC’s Reliability

It is not currently appropriate for Bitcoin to change its code and although international legislation is moving towards clearer regulation, the crypto world is still in the ether. Indeed, despite the position against the proof of work of some European countries, we know from the latest news that Bitcoin will not be stopped, at least for the time being.

The BMC report is the voice of many bitcoin miners but of course we the readers are confident… In fact it is best to try to compare this information with other sources. According to the report issued in February of this year in the magazine joules The data does not add up.

The report stated that cryptocurrency mining contributed to a 17% increase in carbon emissions from operations carried out to support the Bitcoin network.

The magazine’s report provided a breakdown by sector of energy consumption noting that bitcoin mining operations consumed 247 terawatt-hours (TWh) of energy globally. This figure is less than half the energy consumed in gold mining operations and 0.16% of the world’s total energy consumption.

Bitcoin and Sustainability: Is There Objective Data?

It is very difficult to calculate exactly what is the consumption of bitcoin miners. That’s why when we read published studies we always talk about estimates and estimates. But The data sent by the miners and that of joules are so different from each other that suspicions cannot arise.

Miners, according to their interests, will continue to search for the best solution for the balance of cost and return and They will essentially be stopped if they incur high costs or if international environmental policies are strengthened.

Speaking of sustainability, it is important to refer to the entire cryptocurrency chain that begins with the production, assembly, use and disposal of components. As long as globalization creates bridges to evade environmental policies, we can never talk about sustainability.

So the only data that We have at our disposal the estimates of academics, data-sharing forums for miners, and trends of the countries that are most attractive to miners.. This is more than enough to get a clear idea of ​​how Bitcoin will continue and the effects it will have.

Bitcoin and Sustainability: What are the alternatives?

One of the fundamental aspects of cryptocurrencies is free access, fairness, and thus the true decentralization of wealth. Although proof of stake may be an environmental solution, it does not guarantee such equity as it favors centralization of money.

Bitcoin does not currently show that it has an interest in changing its consensus mechanism but will have to do something to reduce its energy consumption if it does not want to suffer from severe restrictions, at least in Europe. The fact that the proposed law to prevent proof of work has not been approved does not mean that there will be no consequences.

The European Parliament must always rely on the great European pillars that are based on the principles of sustainable development, including good environmental policies. So It is almost certain that soon there will be new directives that will limit the trading of certain cryptocurrencies.

Copywriter, born 1992.
exit fromUniversity of TurinI am one of those naturalists and environmental biologists who is always looking for something to discover. Biologically, man is a very interesting species that lives mostly near a forest consisting of buildings, cafes, factories, antiques of various kinds, and deals with problems related to the development of modern society: work, family, hobbies.
Specializing in risk communication, my focus is on imparting solutions on how best to improve and manage our daily lives through the selection of social inclusion, constructive and sustainable options.

Leave a Comment