Climate Killer Bitcoin?
Antonius Gress
🧠 Co-Founder Blockbrain | We transform company knowledge into competitive advantages | Pioneering Knowledge Bots & Knowledge Graphs
Climate Killer Bitcoin?
Bitcoin & CO2 + ESG - a deeper look.
Within the recent weeks and months I have seen more and more uninformed or incomplete statements and opinions being spread about the environmental impact of crypto and especially proof of work chains like Bitcoin.
As someone who
I want to share some information that might help to see Bitcoin and other Proof of Work coins from a different perspective.
So here are some views why Bitcoin mining could be one of the biggest accelerators of the transitioning of energy production towards renewable energies and how Bitcoin mining can help to reduce global warming:
#1 - Bitcoin mining accelerates transitioning of energy production towards renewable energy
Bitcoin miners have a unique set of features as a customer for energy producers: They are location agnostic, time-of-day agnostic and they have an insatiable appetite for both existing & new energy production.
Those features help to make renewable infrastructure projects more profitable and thereby accelerate investments into renewable energy infrastructure by improving ROIs for investors - as it needs less time to pay off the capital investments of e.g. a new wind farm.
Make sure to watch this video and / or read this twitter thread to understand the details - I promise it will be worth your time.
Thank you @Daniel Batten for sharing your research!
More resources:
#2 - Bitcoin mining reduces global warming by using Methane
Methane (CH4) emissions are a huge problem and even worse - it has 80 times the warming power of carbon dioxide (CO2) over the first 20 years after it reaches the atmosphere.
Besides agriculture, the biggest emitters of Methane are the oil & gas industry and landfills.
The sites are often off-grid and the gas often can´t be captured and transported economically. That´s why it either leaks into the atmosphere or is getting burned into the air (so called gas flaring).
Bitcoin mining and it´s location-agnostic feature can help to convert methane into 80x less harmful CO2 emissions by using it as fuel and use the energy produced in the conversion process to earn money via Bitcoin mining for the oil industry, thus making it more economically feasible to save the environment.
Check out this Twitter thread (again from Daniel Batten) for more details.
I am not sure whether we can really reduce our methane emissions by 8% by 2030 as written in this thread. But even if it is only 1% it would be a huge contributor to reduce global warming.
More resources:
#3 - The share of renewables in Bitcoin mining is higher than most other industry sectors and large industrialized countries
The chart above shows that the energy mix of Bitcoin mining is already more sustainable then the major states of the world. And the share of renewables in Bitcoin mining is further increasing in a rapid way.
One common argument against the renewable share of Bitcoin is that “dirty” energy needs to be used somewhere else instead, as the renewable energy share of Bitcoin is missing somewhere else. This argument has truth in it, but as laid out in point #1 above and in this twitter thread by @marcjandrew, we need much more energy overall and Bitcoin mining is accelerating the overall transition towards a higher renewable energy share - not just for the usage for Bitcoin mining but also for usage in other industries.
And on top of that - there are also a lot of examples where green excess / surplus energy is being used for Bitcoin mining, like this example where a hydroeletric powerplant had to shut down as of a surplus of renewable energy in Costa Rica and the energy was wasted.
Resources:
#4 - Bitcoin´s energy consumption is still low compared to gold industry and the global banking system
The energy consumption of Bitcoin is still low compared to e.g. the gold industry and the global banking system.
Of course the Bitcoin network does by far not have the amount of transactions the global banking system handles today. But the energy consumption of the Bitcoin network will also not grow linearly with the growing number of transactions on Bitcoin. This will be ensured by both the design of the Bitcoin protocol as well as technologies like the Bitcoin lightning network.
Summary
The research presented above shows that Bitcoin and proof-of work is probably not the "climate killer" that is it ofen being called - it has indeed potential positive aspects which tend to be overlooked.
Don´t get me wrong please - there are definitely problems in the Bitcoin & crypto mining industry that need to be fixed and the share of renewables and excess energy used for Bitcoin needs to continue to grow. But I wanted to focus on potential positive aspects in this article - there are enough articles out there that are only showing the negative side of Bitcoin mining.
Even in case not all the resources I shared are 100 % accurate, I would like to encourage you to dig deeper and be open-minded for the potential opportunities of Bitcoin / Proof-of-work mining.
Besides the environmental impact, Bitcoin might have significant other positive ESG impact, like financial inclusion / banking the unbanked and more. Maybe I will write about other ESG factors with regards to Bitcoin & crypto in the future.
I hope you liked this post and I hope that it encourages more informed decisions of policy makers and reporting on the topic of Bitcoin and it´s climate impact.
If you enjoyed this article, please feel free to like, comment and share to spread the word :)
#Bitcoin #CO2 #Crypto #ESG #web3
Thank you for sharing your research that inspired me to write this post: Daniel Batten, Peter McCormack, Adam Back, Dan Held, Dennis Porter, Tuur Demester, Nic Carter, @marcjandrew, Lyn Alden, Anthony Pompliano and whoever I forgot ;)
Further resources:
Picture Sources:
Great article Antonius Gress . It is so important to share this kind of content and perspective to tackle the false narrative about Bitcoin in general and especially the energy consumption. Thank you for that. For me personally the fact of real decentralization is the most important fact and the major benefit in favour of BTC. It is hard to believe but true - There is no CEO - There is no single entity in charge (company, foundation) - the Blockchain works by it‘s own and all this is based on technical innovations and safeguarded by POW. So all in all it is important to know that ONLY BTC is totally decentral and other can never achieve this to this extent. I want to point out as well that I also see the need of other strong Blockchains such as ETH but it needs to be viewed with a grain of salt in regards of a single point of failure.
Tech Product Lead | Office of the CTO | Tribe Lead Technology & Innovation @ T-Systems
3yGreat article Toni, I really believe there is a lot of potential, here some additional thoughts: - as we know luckily not all blockchains require the same amount of energy. Some use/will use a PoS consensus mechanism which in the case of Ethereum Foundation, will cut the network’s energy use by ~99.95% (coming very soon: https://ethereum.org/en/developers/docs/consensus-mechanisms/pos/) - also a potential gamechanger are "Carbon credits" where an open market for tokenized or NFT converted CO2 certificates could emerge and financially incentivise energy savings and carbon reduction - if this works out we finally might have solved the fragmented co2 accounting problem and unlock it not only for large corporations. More on this here https://www.coindesk.com/layer2/miningweek/2022/03/27/crypto-carbon-can-blockchain-networks-fix-carbon-offsets/ or here https://www.leafscore.com/blog/how-blockchain-is-revolutionizing-the-carbon-credit-space/
“What we know is a drop; what we don't know, is an ocean" (Sir Isaac Newton) #EnterpriseKnowledgeGraph #eccencaCorporateMemory #KnowledgeCentricity
3yInteresting Viewpoints thanks for sharing. But bear in mind it´s additional to the existing Banking Enviromment.... 😉
Climatetech Investor | Advisor | Bitcoin Analyst
3yKeep up the great work Antonius. Truth will win in the end and you're on the right side of history.