Another mainstream media outlet has published a piece warning of the dangers Bitcoin poses to the environment. We’ve heard these overly simplistic arguments countless times before. But even if one was to accept that Bitcoin’s energy consumption is substantial, the figure still pales in significance to traditional financial institutions, whose carbon footprint is colossal.
‘Bitcoin Is Oil’
Journalist, former bitcoin miner, and current partner at crypto firm Ocuis, Ethan Lou, penned a Guardian article this week, “Another thing you may not know about bitcoin: it’s killing the planet.” In the article, he argues that “all who dabble in it [bitcoin] will be reborn as enemies of the environmental movement” just like those involved in the oil industry. He goes on to compare bitcoin to the black gold as both have suffered crashes and experienced manipulation by major players, adding:
It is not this day, but a day may come when big oil shrinks or changes, becoming less of a target for environmentalists. Bitcoin is the natural next enemy.
The article adds that the closure of mining sites due to electricity concerns is further cause for alarm, and that firms will continue to fight for their right to mine, as cryptocurrency adoption inevitably grows. These companies will also continue to be confronted for their behavior, the author asserts. “While academics and the media have long noted mining’s electricity usage, 2018 marked the year environmental and progressive publications started sounding the alarm,” Lou writes.
Why Not Blame the Banks Then?
Like most Bitcoin hit pieces, the Guardian’s effort was one-sided. It is true that cryptocurrency mining uses a lot of electricity. And it’s certainly true that environmentalists have targeted Bitcoin repeatedly of late. But if we are to have an intelligent debate, we must look at all the facts. Attacking cryptocurrencies for their supposed environmental impact is misleading – especially when banks are the prime culprits in the energy-guzzling stakes.
Dr. Katrina M. Kelly-Pitou PhD, Research Associate in Electrical and Computer Engineering, University of Pittsburgh, made this clear in her article “Stop worrying about how much energy bitcoin uses” where she argued that the “conversation around bitcoin and energy has been oversimplified,” adding:
Banking consumes an estimated 100 terrawatts of power annually. If bitcoin technology were to mature by more than 100 times its current market size, it would still equal only 2 percent of all energy consumption.
As well as looking at how much energy is being used by banks, it’s important to consider what kind of energy is being used. Bitcoin mining typically uses energy which is surplus to demand and which would have otherwise gone to waste. By and large it doesn’t use dirty base power such as coal. Banks, on the other hand, have funneled billions of dollars into the fossil fuel industry – with JP Morgan Chase criticized for funding tar sands oil and coal mining. Kelly-Pitou further uses Iceland, where bitcoin mining is becoming popular, as an example. The country relies on nearly 100 percent renewable energy for its production, and therefore its energy consumption is relatively benign from an environmental perspective. Rather than targeting cryptocurrency, the media should be focusing on major industries – including banking – whose reliance on fossil fuels should be substituted for something greener.
It is ironic that bitcoin, a genuinely useful and transformative financial system, is being targeted for not being green enough when the corrupt institutions that exert hegemony over the global financial system are complicit in exacerbating climate change. Bitcoin, in comparison, leaves only the faintest of footprints on planet earth.
What is your opinion about how bitcoin is portrayed in the mainstream media? Do you think its impact on the environment is overstated? Share your thoughts on the subject in the comments section below.
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