Saudi Press

Saudi Arabia and the world
Thursday, Mar 28, 2024

The green case for Bitcoin, Cryptos aren't causing climate change

The green case for Bitcoin, Cryptos aren't causing climate change

Of all the arguments against Bitcoin, one of the most popular these days is that it is bad for the planet. People who know nothing about cryptocurrencies are often heard saying that Bitcoin mining is such an energy-intensive process that it has become a major contributory factor to climate change.
This is largely bunkum. Far from being a major polluter, Bitcoin could in fact prove to be an environmental solution. But understanding that requires a little deeper knowledge of what Bitcoin is and how it is mined. So here goes.

Spelt with a small “b,” bitcoin is a digital monetary asset. Spelt with a big “B,” Bitcoin is the peer-to-peer network that timestamps bitcoin settlements (around 300,000 of them per day) while hashing them into an ongoing immutable ledger (the blockchain). Performing the significant cryptographic work of registering transactions on the distributed ledger is called mining, and miners are paid with network fees and the issuance of new bitcoin (hence, the word mining). Of course like everything else involving computers, Bitcoin mining and hashing uses electricity. And yes, it uses a lot of electricity.

According to the Cambridge Bitcoin Electricity Consumption Index, which is linked to Cambridge University, the Bitcoin network is currently gobbling up about 116TWh (terawatt hours) of electricity every year. In terms of energy consumption, that puts Bitcoin ahead of US-based TVs (60 TWh) and somewhere in the vicinity of the Netherlands (111 TWh) and gold mining (131 TWh).

Bitcoin’s consumption is however considerably less than the global cement industry (384 TWh), data centres worldwide (200 TWh), or simply what’s lost in transmission in America (206 TWh). And Bitcoin’s 108 TWh is a pittance if you compare it to the global chemicals or iron and steel industries (1349 and 1243 TWhs, respectively) or the planet’s air conditioning systems (2199 TWh).

In energy usage terms, then Bitcoin is, as the civil engineer Hass McCook put it, ‘a rounding error in the global scheme of things.’ And in carbon emissions terms, by McCook’s calculations, Bitcoin emits less CO2 per kilowatt hour than finance, construction, healthcare, heavy industry, or the military. Why is this so?

Bitcoin may be on course to reach its own net zero by 2031
If you look at the energy mix used to operate Bitcoin, you’ll find it’s cleaner than the overall grid’s average — and getting cleaner by the day. Bitcoin may be on course to reach its own net zero by 2031.

According to the Bitcoin Mining Council, a voluntary group of Bitcoin miners, 56 per cent of the network is already powered by sustainable sources (solar, wind, hydro, nuclear, geothermal and other renewables). When the balance of power in mining shifted from China to the USA this summer, the Bitcoin network’s average greenness rose, as Chinese coal-powered mining went offline en masse.

Bitcoin also uses energy that would otherwise go to waste or not be produced in the first place. Iceland, for instance, sits atop a volcano. Hot water is free there, and clean electricity is therefore cheap and theoretically boundless. Unfortunately, you can’t easily transport Iceland’s gorgeous, emission-less electricity to Europe or North America. But you can mine Bitcoin there, and quite easily: 8 per cent of all bitcoins ever minted have originated in Iceland, thanks to geothermal and hydroelectric power.

In places like Texas there’s something called stranded gas: pockets of natural gas that are too far from the pipelines to be economically attached to the network. When set alight ('flared'), this otherwise useless methane is now being used to mine bitcoin in an environmentally friendly way, using electricity that’s effectively free.

Globally, according to Cambridge, the potential electrical generation from gas flaring stands at 688 TWh — more than 6 times what the Bitcoin network currently needs. That means that soon, say five to ten years, Bitcoin’s carbon footprint will trend toward zero – and it might even become negative, owing to Bitcoin’s special suite of energy attributes.

Jack Dorsey’s Square, his Bitcoin business, put it rather well in a recent statement:

“Bitcoin miners are unique energy buyers in that they offer highly flexible and easily interruptible load, provide payout in a globally liquid cryptocurrency, and are completely location agnostic, requiring only an internet connection. These combined qualities constitute an extraordinary asset: an energy buyer of last resort that can be turned on or off at a moment’s notice anywhere in the world.”

In other words, Bitcoin is great for the grid.

One of the drawbacks of the sun and wind is that they are intermittent: they are not constant sources of energy. A related issue is that the timing of when people demand power doesn’t always sync nicely with solar and wind’s daily and seasonal rhythms (to oversimplify: there’s no sun at night, there’s more wind in winter, etc). In short, an energy grid capable of supplying the right amount of energy to humans at peak hours will have too much energy on it at off-peak times, becoming overloaded and congested; that’s a grid, therefore, that can’t be built. Thus, like batteries, Bitcoin mining rigs can become crucial factors in load stabilisation, thereby making renewable energy use possible in ways and in places it wouldn’t otherwise be.

All of this is to say, when it comes to the environment, Bitcoin is a boon, not a bother. McCook’s calculations indicate that “Bitcoin’s carbon intensity will go from 280g [of carbon dioxide per kilowatt hour] today, to around 100g in 2026, and zero by 2031, and maybe, finally, we’ll be done with this debate.”

Sadly, as long as cryptocurrencies remain so feared and loathed, the argument about Bitcoin’s environmental harm, though thoroughly discredited, will remain in circulation. We can expect to keep hearing it until, like refrigerators (which use 104 TWh annually in the US alone), Bitcoin becomes another mundane phenomenon we take for granted in everyday life.
Newsletter

Related Articles

Saudi Press
0:00
0:00
Close
Reports in Gaza: 5 dead from the impact of aid packages dropped by the USA
Apple warns against drying iPhones with rice
China Criticizes US for Vetoing UN Ceasefire Resolution in Gaza
In a recent High Court hearing, the U.S. argued that Julian Assange endangered lives by releasing classified information.
The U.S. vetoed a U.N. Security Council resolution calling for a temporary ceasefire in Gaza, instead proposing its own six-week ceasefire plan contingent upon the release of all hostages held by Hamas
Prince William Urges End to Gaza Conflict
Saudi Arabia ranks first in UN index for e-government services in MENA
Israel has gone ‘beyond self-defence’ in Gaza, says Labour’s Streeting
EU Calls for Immediate Ceasefire in Gaza Conflict
Israel Records 20% Drop In GDP, War In Gaza Is The Reason
Saudi Arabia's FDI Inflows Grow with New International Standards
Venture Capitals Power Up Across MENA Region
Saudi Arabia Introduces Terms for 30-Year Income Tax Exemption for Multinational Companies
Saudi FM: Establishing Palestinian state is only pathway for Mideast stability
Russian opposition leader Alexey Navalny has died at the Arctic prison colony
Elon Musk's Starlink Gets License For Israel, Parts Of Gaza
Influencers Exploit X Platform for Profit Amidst Israel-Gaza Conflict
PM Modi Announces Opening Of New CBSE Office In Dubai
International Criminal Court's Chief "Deeply Concerned" By Rafah Bombing
January Funding for MENA Startups Totals $86.5 Million
Saudi Arabia accelerates digital economy growth through Nvidia partnership
Indian female military officers commend Saudi Arabia's progress and women's empowerment
Israel unveils tunnels underneath Gaza City headquarters of UN agency for Palestinian refugees
Israel deploys new military AI in Gaza war
Egypt threatens to suspend key peace treaty if Israel pushes into Gaza border town, officials say
Israel Utilizes AI Military Technology in Gaza Conflict
Saudi Arabia Warns Of A "Humanitarian Catastrophe" If Israel Moves On Rafah
China Warns Iran to Halt Houthi Attacks or Damage Trade Ties
US University To Shut Qatar Campus Due To "Heightened Mideast Instability"
Iran-backed hackers interrupt UAE TV streaming services with deepfake news
Facebook and Instagram Ban Iran's Supreme Leader
Finnish Airline, Finnair, is voluntarily weighing passengers to better estimate flight cargo weight
U.S. Secretary of State Blinken: The Israelis underwent dehumanization on 7.10, this does not give them the right to do this to others.
Defense Technology Showcase Held in Riyadh
Saudi Arabia’s non-oil exports rise 2.5% to $6bn in November 2023: GASTAT
UK Bans Misleading "Zero Emissions" Claims for Electric Cars
Gaza's Teen Inventor Sparks Light in Displacement
Netanyahu Rejects Ceasefire Proposal, Insists On Total Victory Over Hamas
Guterres appoints independent UNRWA review panel
Private Sector Employment Hits Record High with Over 11 Million Employees in January
Rolls-Royce Executive Encourages Saudi Women to Tap into Their Inner 'Superhero' for Success in Defense Industry
Saudi Arabia launches National Academy of Vehicles and Cars
Saudi Tourism Minister Reveals Plan for 250,000 New Hotel Rooms by 2030
SAR to more than double eastern network passenger capacity with new trains deal
Saudi Arabia Enhances National Defense with New Partnerships
Saudi Aramco Maintains Arab Light Crude Pricing to Asia for March
NEOM Establishes New York Office to Support Investors
Saudi Wealth Fund Draws in Over $25 Billion Worth of Investments in Three Years, Al-Rumayyan Reveals
ZATCA Cautions Against Scammer Schemes
INTRA Defense Technologies inaugurates drone factory in Riyadh
×