Bitcoin Is Great For The Environment
The environmental crowd has come out of the woodwork over the past several months deriding Bitcoin and the network’s energy usage. The term ESG, which stands for Environments, Social, and Governance has been thrown around quite regularly, without any nuanced explanation of the standards. The ESG metric is typically used to gauge a social credit score for a particular company in question by measuring its effect on the environment, what social impacts it has on society, and governance which examines how a corporation polices itself.
ESG is used as a means to point the finger at Bitcoin to blame for wasting energy and having a cataclysmic impact on the environment. Fighting Bitcoin without truly understanding what it represents to the world is a fool’s errand.
Bitcoin critics love to hammer on these points to attack the asset as one that is contrary to ESG standards, and causing direct harm for the environment. They love to point at Bitcoin’s energy consumption without discussing comparisons. Critics also love to talk about Bitcoin using dirty fossil fuel energy sources like coal and natural gas, but never discuss the topic with the nuance it requires for a full perspective. What are they missing though?
Bitcoin's Energy Mix Is Greener Than Most Other Industries
Not only is Bitcoin ESG-friendly, but it is one of the greenest technologies we have. Bitcoin incentivizes miners to seek out renewable energy sources to maximize cost efficiency. This drives clean energy innovation, and provides a buyer of last resort for otherwise curtailed or stranded energy sources. Bitcoin mining is also mobile, which is a huge benefit for capturing these energy sources.
Instead of bringing the energy molecule to the market, which takes massive infrastructure costs and lost efficiencies, Bitcoin takes the market to the molecule. Being able to park Bitcoin mining operations atop oil and natural gas sites enables these companies to flare (burn off) their CO2 gas emissions, instead of releasing them into the atmosphere which would be more harmful.
As a matter of fact, Bitcoin mining is more than 3x cleaner than the gold mining industry, but you won’t hear mainstream news railing against their shiny rock vendors. The above quote is take from a report from SeeTee, a subsidiary of Aker Capital, an industrial investment company with ownership interests concentrated in oil and gas, renewable energy and green technologies.
“The estimated CO2 emission for producing new gold is more than 100 million tons per year. Estimates vary, but recent studies put Bitcoin’s around 30 million tons annually. That’s less than one third of gold’s CO2 emissions. And as renewables increase in the mix, Bitcoin’s CO2 emission intensity should drop significantly. Note that this is still disregarding the cost of refining and storing gold, as well as the negative impact land excavation in less compliant regions of the world has on both people and the environment.
Bitcoin Energy Consumption Is Worth Every kWh
To sum it up with some simple math, 0.001% of global energy use goes to securing the Bitcoin network. A network that grants property rights to 8 billion people for the first time in human history. Let’s break down each part of ESG to understand how Bitcoin actually excels when sized up against each piece of the puzzle.
Environmental - Bitcoin Mining Council survey estimates a 56% sustainable power mix. Bitcoin’s energy mix is cleaner than most industries across the board, and will tend to get cleaner over time as renewables begin to make up more of it’s footprint.
Social - Offers property rights and wealth preservation to 8 billion people. It has the ability to lift those people out of poverty by giving them a savings technology that is not debased or inflated away by central banks, and it offers a censorship resistant monetary network to those living under authoritarian regimes.
Governance - There is no board of directors of Bitcoin. No CEO. Governance is achieved with a harmonious balance of economic incentives. It's decentralized nature protects the protocol's core set of rules, ensuring that the network remains resilient, nimble, and no single entity can change the rules to their favor.