A very interesting article coming from our partner, the Frankfurt School Blockchain Center, tackles an always hot topic: Bitcoin and its environmental impact.
Bitcoin has long faced criticism for its high energy consumption due to the proof-of-work mechanism. However, a holistic view reveals that Bitcoin’s energy use is often misunderstood and misrepresented. Despite its reputation, Bitcoin mining has a higher percentage of renewable energy usage than many Western countries. In 2022, Bitcoin mining utilized approximately 59.5% sustainable energy, compared to the USA’s 41%.
The Value of Bitcoin and Energy Consumption
Bitcoin mining involves solving complex puzzles to validate transactions and secure the network, creating new Bitcoins in the process. While this consumes energy, it provides a decentralized, tamper-proof ledger, replacing central authorities like banks, which also consume resources.
The key argument is that Bitcoin’s energy consumption should be viewed in context. All technological activities, from sending emails to streaming videos, consume energy. The critical factor is not the amount of energy used but the source of that energy. Bitcoin mining, driven by profit motives, often takes place in locations with abundant, cheap renewable energy. For instance, Bitcoin is mined using geothermal energy in Iceland, hydropower in Norway, and solar, wind, and geothermal energy in El Salvador.
Environmental and Economic Benefits
Bitcoin mining can accelerate the global transition to renewable energy. By utilizing excess electricity from renewable sources, mining operations help to monetize surplus energy that would otherwise go to waste. This can encourage further development of renewable infrastructure and technologies. Additionally, the heat generated from mining can be repurposed for public heating needs, adding another layer of utility and efficiency.
The criticism of Bitcoin’s environmental impact often overlooks these positive externalities and the broader context of energy use in our digital age. Unlike many traditional industries, which receive substantial government subsidies and rely on unsustainable practices, Bitcoin operates on built-in incentives that align economic and environmental benefits.
Read the full article here: https://fsblockchain.medium.com/bitcoin-climate-ally-not-climate-disruptor-8e4915053560
To learn more about blockchain technology, its applications, and resources for further training, visit www.besideproject.eu.
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