The massive usage of energy by Bitcoin mining has become a hotly discussed topic lately. Elon Musk’s
announcement in May in regards to Tesla stopping BTC payments due to environmental concerns only served to pour more oil into this particular fire.
Musk had to deal with a lot of criticism on Twitter over this decision, but his actions have highlighted a real enough problem: Bitcoin mining does consume great amounts of energy. Musk’s intentions aside, I find it hard to blame him for pointing that out.
However, I do not believe that Bitcoin miners are wasting all this power. Bitcoin operates on the Proof-of-Work consensus and, as such, derives its efficiency and security from power usage. This system needs to consume significant amounts of energy to remain
resilient against both internal and external threats.
Having only suffered
two network outages in all of its 12-year history, Bitcoin’s network can give some of the world’s leading cloud service providers a run for their money in terms of reliability and resilience.
For that reason alone, things should be considered very carefully in regards to how Bitcoin secures its network, before any drastic changes are attempted. To my mind, a more productive thing to do would be to focus on mixing the types of energy that are
used to power Bitcoin mining equipment.
Despite the preconception that cheap coal-powered electricity accounts for most of the power usage in mining, there are statistics that show the share of renewable energy growing larger, powering as much as 73% of the Bitcoin network’s hash rate.
Furthermore, it should not be forgotten that BTC mining can actually be helpful, as it makes use of energy that would otherwise be wasted. Excellent examples here would be mining farms in Sichuan that take advantage of the region’s hydropower surplus, or
oil and gas producers that leverage stranded gas to mine BTC. There are even cases when companies use the heat from mining equipment in order to
With all this in mind, I believe the long-term solution to fixing Bitcoin’s energy issues would be to pay more attention to these kinds of development angles and speed them up. Elon Musk’s recent actions have drawn many eyes to this topic, and I think it’s
safe to expect that developments in this field are going to pick up the pace, with Bitcoin becoming a lot greener in the next few years.