One of the most common criticisms of bitcoin is its mining operations, which are held to consume more energy than the Republic of Ireland. BTC mining energy consummation and mining centralization issues are often cited as reasons why new generation cryptocurrencies are superior. But according to Dr. Katrina M. Kelly-Pitou Ph.D., of the University of Pittsburg, this fear is overblown.
BTC mining impact will be reduced
In an article titled ‘Stop worrying about how much energy bitcoin uses’, Kelly-Pitou outlines some of the false narratives and media drama surrounding the issue. There is a pervasive idea that bitcoin mining is ‘unsustainable’ and that it will get worse, ultimately contributing heavily to an ongoing global energy crisis. The sensationalist headlines make it seem like energy consumption is the ‘Achilles Heel” of bitcoin, which is simply not accurate.
“I think that the conversation around bitcoin and energy has been oversimplified. New technologies – such as data centers, computers and before them trains, planes and automobiles – are often energy-intensive. Over time, all of these have become more efficient, a natural progression of any technology. I believe many fail to understand one of the most basic benefits of renewable energy systems. Electricity production can increase while still maintaining a minimal impact on the environment.”
The author makes the point that all energy consumption is not equal. BTC mining companies can relocate to locations with an abundance of alternative clean energy sources, using more electricity without being particularly harmful to the environment. Regions such as Iceland, where many bitcoin miners have relocated, rely nearly 100% on renewable energy. While bitcoin energy consumption is increasing, an analysis of its carbon footprint is a much more accurate indicator of the actual environmental cost.
Bitcoin mining consumption – nothing to fear
Banking uses an estimated 100 Terawatts of power compared to bitcoins 30. If bitcoin was to mature by 100 times its current market size, it would still only consume 2% of the total global energy consumption, while presumably powering the whole financial infrastructure. In other words, BTC mining energy consumption is tiny on a global scale and still uses nowhere near as much as the banking system. Additionally, it will become more efficient as the industry advances, similar to what happens in all technology-related sectors.
Mining centralization is a separate issue from mining consumption. Mining centralization effectively means that nefarious actors can potentially come together more easily and dominate the network. While there has thus far been no evidence of this, it is a more significant fear as compared to energy consumption, which has been exaggerated by the media.
Digital Nomad with an interest in Zen and Blockchain technology.
Law graduate with 3 years experience as a consultant in the capital markets industry and 4 years experience freelancing on UpWork as a Creative Writer.