It’s deceptively easy to cite energy statistics about Bitcoin mining as evidence that it’s bad for the environment. Nevertheless, civilizations have always expended energy on new technologies that initially appeared to be terrible for the environment, such as railroads, highways, telephone lines, batteries, natural resource mines, or computers, among endless examples.
Substantially all industrial activities are bad for the environment. The more relevant question is not whether Bitcoin mining is bad for the environment per se, but rather ⏤ as with every other use of power ⏤ is the activity worth it?
Indeed, a closer examination of Bitcoin statistics makes it impossible to summarily assume that Bitcoin is bad for the environment, especially when compared to other unquestioned uses of power like holiday lights or video games.
For example, the Bitcoin Mining Council’s second quarter report indicates that Bitcoin mining consumes 189 TWh of electricity in a single year, compared to 162,194 TWh of energy used for all purposes by the entire world. It’s curious to consider the media’s fixation on a new technology that consumes less than 0.2% of the world’s energy.
When compared to Bitcoin’s 189 TWh, consider the energy usage of China (39,361 TWh) or the US (29,291 TWh). Even consider the amount of energy wasted due to simple inefficiencies in power grids every year (50,000 TWh) ⏤ 264 times more than Bitcoin.
White House research on Bitcoin and the environment
Bitcoin miners traditionally seek out inexpensive energy sources, including stranded and renewable sources. The Bitcoin Mining Council, which aggregates data from the majority of Bitcoin’s hashrate, estimates that 59% of the energy used by bitcoin miners came from renewable sources in Q2 2022. In fact, Bitcoin’s use of renewable energy sources increased 6% versus the same quarter in 2021.
Moreover, due to the easy transportability of Bitcoin mining machines, Bitcoin is uniquely suited to mitigate stranded energy sources like gas wells and flares.
Of course, these statistics have not stopped opponents of Bitcoin from spreading misinformation about its energy use. The Biden Administration commissioned a report on crypto mining’s climate impact that experts like Nic Carter called unscientific and riddled with errors.
Carter argued that the report “wouldn’t get a passing grade in a graduate-level university course,” (our emphasis). He accused the White House of pursuing a political agenda wrapped in the cloak of climate change.
Nic Carter has repeatedly criticized journalists for getting facts wrong about Bitcoin mining. He accused the New York Times, for example, of citing critically flawed academic papers and debunked studies like Mora et al.
Bitcoin’s long history of aversion to lobbyists
Despite the New York Times’ claims to the contrary, Bitcoin has no plans to switch to a Proof-of-Stake algorithm like Ethereum. Nor are Bitcoiners likely to let lobbyists like Greenpeace influence Bitcoin rule-making with expensive ad campaigns.
Bitcoin developers have a history of ignoring pressure from corporate interests. They famously rejected a corporate-led initiative called The New York Agreement to increase Bitcon’s blockchain size, which would have led to greater centralization.
Democrats in the House of Representatives sent a letter to the Environmental Protection Agency (EPA) urging it to rein in Bitcoin’s energy use, claiming, “A single Bitcoin transaction could power the average US household for a month.” By this logic, a single submarine, bank vault, highway, data center, or gold mine consumes the same power as entire neighborhoods for a month, therefore the EPA should pass urgent rules to curb emissions from them, as well.
In May 2021, Galaxy Digital Mining compared Bitcoin’s energy usage to the banking industry and gold mining. Its report noted that Bitcoin mining used 113.89 TWh per year, the banking system used 263.72 TWh per year, and the gold industry used 260.61 TWh per year.
Banks and gold each have double the negative impact on the environment as Bitcoin mining, if one measures it purely in terms of energy usage. Bitcoin is a new financial system that might obviate the need for trusted intermediaries to process financial transactions like banks and physical stores of value like gold.
By that logic, Bitcoin’s reduction of the need for banking and gold inefficiencies could, actually, be good for the environment.