People have long disparaged Bitcoin mining due to its energy consumption. An article published in Forbes back on May 30th accused Bitcoin of being one of the big reasons for the increase in global energy consumption. A Ph.D. scholar, however, has dared to challenge the conclusion of this claim.
Dr. Katrina Kelly-Pitou, a Research Associate in Electrical and Computer Engineering at the University of Pittsburgh, believes that the whole concept of Bitcoin’s energy consumption has been oversimplified and blown out of proportion. She specifically studies the transition towards energy systems with a lower carbon footprint that is a part of clean energy technology.
She notes that every new technology that comes along is energy-intensive. However, such technology becomes more energy efficient as time passes, which reduces their carbon footprint and the amount of power needed. This change is due to a desire to improve the technology while also reducing costs.
In order to produce one Bitcoin, the required computational power is huge. In terms of cost to mine 1 Bitcoin, 90% of the cost is dedicated to the electricity. According to reports, Bitcoin consumed more than 30 Terrawatts of electricity in 2017.
While this is indeed a big number on its own, it dwindles in significance when put into context with other industries. For example, the banking industry consumed more than 100 Terrawatts of electricity in 2017. There’s no media hue-and-cry about reducing the power needed to process all those loan applications.
There’s More Than Meets the Eye
But let’s not restrict our evaluation only on the basis of electricity. Dr. Kelly-Pitou asks us to focus on the carbon footprint of the technologies. According to her, we should focus more on the geography aspect of Bitcoin mining.
It is interesting to note that China is a hub of Bitcoin miners and that 60% of its electricity production comes from coal. In such countries, yes, Bitcoin mining does create an environmental impact. In fact, China is one of the leading countries in carbon emission rate, so the criticism is indeed valid. However, not all regions of the world are equal when it comes to energy production.
Case in point is the Pacific Northwest. This region features low electricity costs with a small carbon footprint. The reason is mainly attributed to its electricity production via hydropower. So do we really need to worry about the environmental impact of Bitcoin mining in the Pacific Northwest?
Also, in Europe, Iceland has become the new face of Bitcoin mining due to its cheap electricity. It is one of the few countries that rely practically 100% on renewable energies for its electricity production. Hence, Bitcoin mining in such countries, or regions with a heavy emphasis on renewable energy, shouldn’t be criticized to the extent that crypto mining usually suffers.
Dr. Kelly-Pitou stresses the fact that the critics of Bitcoin mining should focus more on carbon emission and less on electricity consumption. She asks critics to hold only certain countries accountable that allow for dirty energy production and not crypto mining in general.
Most people criticize the energy consumption of Bitcoin mining without actually diving into the specifics, such as its proper context when compared to other industries. The truth is that crypto mining is more energy efficient and will continue increasing that efficiency as technology improves. The increasing reliance upon renewable energy also continues to lessen the environmental impact of cryptocurrency mining. Overall, Bitcoin mining isn’t the monster that’s going to gobble up all of the world’s energy supply, no matter how hysterical a headline may say otherwise.
What are your views regarding Dr. Kelly-Pitou’s opinion? Share your thoughts in the comment section below.
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