There are still ongoing debates about the Bitcoin mining energy intensity and its impact on the environment happening all around the world. 🗣️
Why is Bitcoin harmful to the environment?
Bitcoin uses the Proof-of-Work consensus algorithm, that utilises high computational power and consequently high energy consumption for the system to work properly.
Accused of every sin
In December 2021, the US Senator Elizabeth Warren stated that the electricity consumption of mining digital gold is “comparable to that of Denmark, Chile, Argentina, and the state of Washington.” In early 2022, she requested environmental impact data from six big mining companies. 💿
Same year in June, the Bank of Sweden suggested banning Bitcoin and all the other PoW cryptocurrencies to prevent environmental impact. According to the financial institution report, energy consumed by that mining method is equal to 200,000 households. 👨🌾
Hodlers.pro will try denying all those statements and calculating the real energy consumption as well as predicting the mining price after a couple decades. 🔮
How dangerous it actually is
Armed with insights from Arcane Research and the Cambridge Center for Alternative Finance (CCAF) we started our own research (Even though the article is placed in the vision section). 😆
Never heard of CCAF?
Those guys provide us with plenty of useful statistics and information about all the financial sectors, including DeFi.
The CCAF website has amusing comparisons designed to give an idea of the Bitcoin Networks “voracity”.
For example, the energy consumption of the first cryptocurrencies network is comparable with that of gold mining. However, we don’t see anyone being against gold mining too much. 🙃
The Bitcoin network is also comparable to countries such as the Philippines, Kazakhstan, Pakistan and the Netherlands, but certainly not “Denmark, Chile, Argentina, and the state of Washington” combined. 🤔
We can also see the nets comparison to all the household tech.
A figure of almost 100 TWh may seem impressive. However, on a global scale, it is not that great - less than 1% of the overall worldwide consumption. 📉
How will that change?
With historically average 0.4 BTC transaction per block fee and reaching the $200,000 mark by 2040, energy consumption will remain at about the current level. This, according to the research, is the result of halvings that cut off low-performing players from the market. When reaching $2 million price by 2040, Bitcoins share in global energy consumption is calculated to only be 0.36%. Although the figure is relatively high, it is still well below the “apocalyptic estimates” made by some critics of digital gold. 🥇
Halving saves the day and all the disturbing predictions are just biased opinions that have essentially nothing to do with the actual facts.
Stay tuned 📻