Yesterday Justin Rowlatt, correspondent for environmental issues for the BBC, published a note where he wanted to alarm the world about the environmental impacts of Bitcoin (BTC), especially its energy footprint.
Bitcoin (BTC) not good for the environment?
The debate regarding the relationship between Bitcoin and the environment is not new and you have probably heard valid arguments from each of the parties.
In essence we must remember that the impact of Bitcoin on the environment is through mining activity. As many will know, this is an activity that consumes too much electricity.
In fact, the University of Cambridge analysis, cited by Yahoo Finance, suggests that the Bitcoin network uses more than 121 terawatt hours (TWh) per year. This positions Bitcoin among the top 30 electricity consumers worldwide.
It is also worth mentioning that, according to Deutsche Bank Research, the annual electricity consumption of the blockchain system already exceeds that of countries such as the Netherlands, and is close to that of Norway or Argentina.
Therefore, the main concern regarding Bitcoin is its energy footprint.
However, as is normal, not everyone thinks the same. Yassine Elmandjra, an analyst at ARK Investment Management LLC (ARK) shared her thoughts on Twitter.
Interestingly, Elmandjra exposed a series of reasons why Bitcoin (BTC) mining is not harmful to the environment, but is even favorable.
Price comes into this game
According to the BBC, Gina Pieters, a professor at the University of Chicago, argues that the higher the price of Bitcoin, the more miners will want to get into the game.
It is worth mentioning that, in addition to the high electricity consumption, the CCAF (Center for Alternative Finance of the University of Cambridge) team surveyed various miners and found that approximately two-thirds comes from fossil fuels.
But, in addition, Rowlatt mentioned that Alex de Vries, founder of the Digiconomist website, considers that crypto has an Achilles heel.
Recall that the large demand for electricity from Bitcoin comes from the task that requires solving millions and millions of calculations. Therefore, Vries argued that the effort required to solve those calculations makes Bitcoin unscalable.
“If Bitcoin were adopted as a global reserve currency the price would probably be in the millions … and those miners will have more money than the entire US federal budget to spend on electricity,” explained. Therefore, he added that «we would have to double our global energy production just for Bitcoin».
In this way, the concern is long-term. Practically a series of arguments were exposed that raise the non-scalability of Bitcoin as we know it today.