Bitcoin (BTC) is often used to criticize all blockchain-based projects. This is understandable since Bitcoin was the first project to use a blockch
Bitcoin (BTC) is often used to criticize all blockchain-based projects. This is understandable since Bitcoin was the first project to use a blockchain, is arguably the most recognizable and is the largest cryptocurrency by market cap.
In the first half of this article, I will use Bitcoin as a proxy for all blockchain-based projects because most people associate blockchain with Bitcoin. Anything environmentally positive that can be said about Bitcoin will be doubly true for the vast majority of newer blockchain-based projects since Bitcoin uses the oldest version of blockchain technology.
Blockchain energy consumption
Bitcoin has been attacked for high energy consumption. Headlines pointing out that Bitcoin’s electricity usage is comparable to a country’s total consumption is a popular critique. Comparisons are useful, but they can have a deceptive framing effect. For example, the statistics most often cited in these attention-grabbing headlines are taken from the Cambridge Center for Alternative Finance (CCAF). The same organization also points out that transmission and distribution electricity losses in the United States could power the entire Bitcoin network 2.2 times. Always-on electrical devices in America consume 12.1x more energy than the Bitcoin network.
So, the Bitcoin network uses as much electricity as a small country or far less than one sliver of America’s energy budget. Is that a lot? It depends on how you look at it.
Related: Is Bitcoin a waste of energy? Pros and cons of Bitcoin mining
Another often used critique is that Bitcoin’s electricity consumption is growing so rapidly that Bitcoin emissions alone could push global warming above 2°C, or consume all of the world’s energy by 2020. The latter didn’t happen. Why? First, like most network-based technologies, Bitcoin is following an adoption curve defined by the theory of diffusion of innovations — an “S curve.”
The explosive, exponential-like growth in the first half of the curve slows down considerably in the latter half. Second, large and predictable improvements in computer efficiency will continue to lower the energy cost of computing even as Bitcoin’s growth slows. Third, such predictions don’t take into account the evolving energy mixture of Bitcoin.
Blockchain energy mixture
Almost all of the energy consumed by blockchain projects come from electricity used by computers that secure the network. Bitcoin calls these “miners,” but newer blockchain projects can use much more efficient “validators.” Electricity is produced from many different sources, such as coal, natural gas and renewables like solar and hydroelectric. Those sources can create very different levels of carbon emissions, which largely determines their environmental impact. The two most prominent estimates of Bitcoin’s energy from renewables range from 39% in this report to 74% in this report. Either of these estimates is “cleaner” than America’s energy mixture, which is just 12% from renewables.
There is evidence that the public scrutiny to which Bitcoin has been subjected has most likely ensured that energy from renewables will only increase in the future.
Blockchain is worth it
Bitcoin’s energy consumption and composition are not perfect, nor is it as terrible as is often reported. What is often lost in the conversation over Bitcoin’s energy usage is whether Bitcoin’s use of energy is worthwhile. Plenty of industries require energy or produce massive amounts of waste, but most people deem the environmental costs to be worthwhile. The agricultural industry requires massive outlays of fossil fuels for fertilizers and to power field equipment, not to mention producing harmful runoff. Yet, despite the environmental negatives, we recognize the overwhelming importance of growing food. Instead of discarding agriculture, we strive to improve the environmentals of agriculture.
Related: Green Bitcoin: The impact and importance of energy use for PoW
Whether enabling the 1.7 billion unbanked to gain financial inclusion or offering an alternative to predatory international remittance services, it seems clear to me that Bitcoin is worth the energy usage. It’s even clearer that enterprise blockchain is an unmitigated public good.
Newer, alternative blockchain technology uses at least 99.95% less energy than older ones. Enterprise blockchain can use even less energy since it can be tailored for specific use cases. In addition to using significantly less energy, Enterprise blockchain is helping organizations achieve sustainability goals.
Blockchain as a key driver for renewable energy
Solar and wind are now cheaper than fossil fuels such as coal and natural gas. Solar and wind are now comparable to geothermal and hydroelectric. Despite solving the cost problem, renewables have several problems preventing mass adoption. Geothermal and hydroelectric are geography bound. Solar, wind and to a lesser extent, hydroelectric suffer intermittency and grid…
cointelegraph.com