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Ask Dr. Bitcoin: How environmentally friendly is Bitcoin?
“I keep hearing that Bitcoin is powered by computers and that mining it can take a lot of energy. How environmentally friendly is Bitcoin?” asks Concerned About the Environment.
Concerned here has a good question about the nature and distribution of Bitcoin and it’s one that has come up before such as this Ars Technica article. The process of mining can be energy intensive on an individual basis, but compared to many other industries it’s really a kitten on the couch when it comes to total consumption for the service that it provides.
“Since BTC just passed up PayPal as a payment processor in those charts, let’s compare eBay’s carbon footprint to BTC mining,” says Mark “Rizzn” Hopkins, Bitcoin Overlord of SiliconANGLE (and expert too.) “eBay said in 2010 that they used half a million megawatt hours that year (which seems a little low). This doesn’t take into account their waste footprint from their over 30,000 employees and associated business processes.
“Meanwhile, BTC currently consumes an estimated 1k megawatt hours a day, coming to over a third of a million megawatt hours a year. There are no business processes to this other than the Blockchain. There is no paperwork, no employees driving to work, and no waste produced from office workers.”
The Bitcoin ecology itself provides a powerful service to those who use it: it’s a store of value, a commodity that can be traded and invested, and an exchange of value like a currency for people who want to buy/trade goods. The result is that Bitcoin as a technology is abstractly a powerful way for people to exchange value or invest without having a big industry do it for them—just the work of hundreds of thousands of other individuals who audit (or mine) the Blockchain.
When viewed as a currency exchange service, Bitcoin most definitely shows that it’s more energy efficient than even the current traditional banking and credit systems that we use on a daily basis.
Hopkins sums it up, “Most certainly the carbon footprint of BTC measured in this way is decidedly less than their competition in this space.”
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