Recent headlines in the New York Times and other media outlets have decried the large energy cost of bitcoin mining, which requires complex computational power and is vital to the security of the Bitcoin blockchain.
The other is on refuting those claims, diving into the minutia of energy consumption, scale and the vast array of complexities that are electrical grids, mining equipment and well, bitcoin, generally.
Both of these focal points are essential but what’s missing is a situating of bitcoin mining and energy in a larger context.
“When looking at bitcoin and comparing its energy use to all of Argentina for example, what, to me, that should do is compel the next question, which is, what’s the energy consumption of the Internet of Things or even .
The question is one of bitcoin and how we ascribe value, but also of everything else such as all the processes of our lives that we take for granted or as a matter of settled fact.
“The reason that bitcoin mining has been discussed much in research and the media is because its energy consumption is significant,” said Susanne Köhler, a researcher at Aalborg University in Denmark who has conducted life-cycle analysis of blockchain technology.
She said if miners are serious about reducing the energy consumption of bitcoin mining, switching to a different consensus mechanism is the obvious step to take and that she was unaware of any other approach that would lead to a comparable reduction of the energy consumption.
Kaloudis points out around 40% of mining energy is renewable and just over three-quarters of miners use renewables in their energy mix.
“Bitcoin provides a means to monetize wasted energy, improving the financial standing of energy companies, allowing for investment into clean energy production and transportation,” he said.
Investment in bitcoin mining has trended, in fact, toward using more renewables.
These measures are, to be fair, still early.
On one hand, the fact that bitcoin mining consumes an enormous amount of energy is well known.
On the other hand, there is also a lot of work to be done with regards to sustainability across all sectors, not just bitcoin.
It’s obvious to most that fuel companies, for example, provide vital services.
Maurer suggests that, in comparing Amazon to bitcoin, one needs to consider not just how much energy is used at their most basic level, operationally, but also the resultant, secondary outflows.
Bitcoin, of course, has its own associated outflow emissions to consider.
The conversation shouldn’t isolate bitcoin as an industry outside of and piling onto the world’s energy consumption while being superfluous, but rather infrastructure about which we can make choices and act accordingly in other areas around.
“Argentina’s economic woes, from enormous debt obligations to high inflation, compounded by the COVID-19 pandemic, drove its population to seek alternative ways to store their wealth this year,” wrote CoinDesk reporter Sandali Handagama late last year.
National currencies are inherently manipulated and part of a political process that has stakes whether it be elections, solvency or something else.
ATM fees, account maintenance fees, check cashing fees, overdraft fees and others have a huge affect for downstream individuals when considering the financial players that be.
“Bitcoin as a censorship-resistant mechanism for receiving and sending payments online,” said Rainey Reitman, chief program officer for the Electronic Frontier Foundation and co-founder of the Freedom of the Press Foundation.
There may be an assumption that as long as you follow the law and don’t do anything wrong, PayPal, for example, won’t shut down your account.
But with its genesis, design and rise to prominence, it raises fundamental questions about power, the way the world is constructed, and whether that’s something we’re comfortable with.
“Bitcoin draws attention to the fact that political apparatuses sustain any kind of money that we have had in the world, and that there are relationships with authority,” said Maurer.
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