Bloomberg published a narrative that has continued to be debunked for a long time that mining Bitcoin is bad for the environment due to its use of energy, and Coinshares quickly swung back debunking the argument.
“The Bitcoin algorithm demands increasing amounts of computational power to validate transactions. If it were a country, its annualized estimated carbon footprint would be comparable to New Zealand at about 37 million tons of carbon dioxide. One Bitcoin transaction would generate the CO2 equivalent to 706,765 swipes of a Visa credit card, according to Digiconomist’s closely-followed index, albeit with none of the convenience of plastic. Add in Bitcoin’s primary use as a speculative instrument and the frequent regulatory warnings it draws, and it’s hard to imagine it ever scoring high on ESG,” Bloomberg’s Lionel Laurent writes.
The author continues, “Energy estimates aren’t an exact science, but the direction of travel for power consumption has been clear. Bitcoin’s annual consumption is estimated at around 77.8 terawatt-hours, up from 9.6 terawatt-hours in 2017, according to Digiconomist. Another index, compiled by the Cambridge Center for Alternative Finance, estimates a higher figure of around 108.4 terawatt-hours. The economics of mining outpaced the average laptop long ago, with firms like Marathon Patent Group Inc. now buying tens of thousands of specialized chips at once to power their crypto farms.”
These arguments are flat out lies, misleading and wrong to use the word “energy” instead of electricity, and Coinshares’ Chief Strategy Officer Meltem Demirors expressed such in a tweet highlighting Bloomberg’s article. Demirors tweeted, “ah, love the classic mining FUD cycle. It’s not like we spent the last three years debunking this.” She added, “Over 70% of Bitcoin mining uses renewables – data and methodology,” tagging Coinshares and a colleague, with laughing emojis.
CoinShares is an investment firm that manages $750M in assets and is a trusted partner to investors and entrepreneurs. But the company also provides research on the digital asset industry, including debunking the age-old myth that Bitcoin uses immense amounts of electricity and that none of it is focused on renewables.
ah, love the classic mining FUD cycle it’s not like we spent the last three years debunking this— Meltem Demirors (@Melt_Dem) February 7, 2021
over 70% of bitcoin mining uses renewables – data and methodology from our @CoinSharesCo @C_Bendiksen – https://t.co/ZLcLEXlG5g https://t.co/yd9IjvQx1U
In a report by Coinshares that Demirors shared to counter the article by Bloomberg, is extensive research released in December 2019 that debunks that Bitcoin is wasting so much electricity. It goes further to show how over 70% of Bitcoin mining is actually now using renewable energy to mine. The report added that this makes Bitcoin reportedly, “more renewables-driven than almost every other large-scale industry in the world.”
Bitboy Crypto has previously reported that Square Inc, has taken the lead to shift even more Bitcoin mining to renewable energy by starting the Bitcoin Clean Energy Investment Initiative, investing $10 million dollars into a greener Bitcoin future.
Square has a company goal to become net-zero on carbon emissions for its operations by 2030. Square has partnered with Watershed, a company that powers climate programs in business, to accomplish this task.
Square’s Bitcoin Clean Energy Investment Initiative has been set up to support green energy technology development in Bitcoin mining. Further, according to its announcement, any gains made from the investment will be placed back into the initiative for a greener future in Bitcoin.
Of course, these narratives pop up every year, with emphasis on bull runs. In fact, just before the end of the last bull run in December 2017, Newsweek ran an article entitled: “Bitcoin Mining on Track to Consume All of the World’s Energy by 2020″ this data came from Digiconomist. The same story today in Bloomberg is largely based on Digiconomist, but there’s just one problem as CNBC writes in 2019, “researchers say its estimate is not based on hard data.” In other words, it’s seen as one man’s estimate, and it’s not reliable or peer-reviewed at all.
CNBC goes on to explain, “This is a theme that media outlets such as Bloomberg News, CBS, CNN — as well as CNBC — and others have echoed in articles citing the Digiconomist data. It has also been cited in research reports and financial newsletters and by closely followed investors like Stanley Druckenmiller in an interview on CNBC last week. But we are learning now that this energy-gobbling estimate, which has also been cited in bearish cases about Bitcoin, may be flawed and has been used to make an extreme extrapolation assumption seen in the past when new technologies emerge.”
There is no doubt that Bitcoin uses electricity, but more and more of its siphoned energy is being directed towards renewable energy solutions such as hydropower, wind, and solar. According to the experts, though, there is no way to gauge how much energy is used in cryptocurrency mining operations. One of which said the following in 2017:
“Many of those calculations that you see today, I think, are based on very weak assumptions,” said Christian Catalini, an assistant professor at the MIT Sloan School of Management who studies blockchain technology and cryptocurrencies.
“I don’t think anybody can make a credible claim about the current” electric power use for bitcoin mining “without actually having data from the miners.”
Don’t believe the hype any time one of these reports comes out. It’s literally used to attempt to suppress the price of Bitcoin from going up, and it’s usually during key points in the market.
Bitcoin is currently trading at [FIAT: $38,932.33] DOWN -1.2% in the last 24 hours, according to Coingecko at the time of this report.