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14 May 2020

Bitcoin and Climate Change: How Detractors Are Funding Motivated Studies Against

Introduction

For a very long time, studies on how Bitcoin Mining is using ginormous amounts of energy and contributing to climate change have been doing the rounds. People, who are not favourably disposed to cryptocurrencies, were pointing out how Bitcoin single-handedly will not help the world reach the goals of the Paris Agreement.

However, in a recent study by the University of Denmark, it has been proven that Bitcoin’s carbon footprint is not as massive or disastrous as it was made out to be. As the world continues to grapple with climate change and global warming, we look at how the debate on Climate Change and Cryptocurrencies is panning out.

 

Are the Studies on the effects of Bitcoin Mining conclusive to pass a judgement?

The brief answer to that is a resounding NO! Bitcoin’s entire ecosystem is not guilty of using great energy resources. It is only the mining aspect of the crypto, which can be called out into question. However, transactional activities, trading norms, and other aspects use only a fraction of energy.

In recent years, Bitcoin miners are also moving to green energy sources for their mining activities. It should also be pointed out that the world has already mined nearly 90% of all Bitcoins, which will eventually be in circulation. (18.5 Million have been mined of the total of 21 Million Bitcoins).

It should also be noted that most studies are very aggressive when it comes to making projections. They are using hardware and making conjectures, believing that natural sources of energy are used always to mine Bitcoins. They do not take into account the fact that many miners have moved away from traditional sources of energy to green sources.

 

Why China holds the key when it comes to energy questions on Bitcoin

China accounted for a massive 50% share in the Bitcoin Mining industry before the country banned it. In other words, miners used to favour China when it came to mining. As we all know, China being a relatively closed society, did not end up divulging official figures.

Many in the crypto ecosystem also point to the fact that a majority of mining activity in China took place in Southern China. This is an important point, as the power/energy requirements of the region is met by renewable hydroelectric power.

Analysts and people close to the crypto universe argue that haters have motivated studies done on Bitcoin Mining and the Energy question. While the argument is still in motion as to who has done what, it has contributed to tainting the image of Bitcoin.

 

What is the Bitcoin Universe doing about the Energy allegations?

You can say that Bitcoin sits at the height of technological advancement. The answers and probable solutions to this issue will also need to be technological. This is what is currently happening.

Scientists and experts are evolving a new process- ‘The Lightening Network Update’. This is a series of innovations aimed at streamlining and combining transactions on the Bitcoin platform. Early studies have demonstrated that the Lightening Network can improve the overall efficiency of the platform, further curbing the use of energy or power.

Alt coins like Ethereum are experimenting with a new tech called ‘Casper’. This virtually eliminates the energy consumption of the mining activities. However, one thing is clear- advocates of Bitcoin are socially responsible and environmentally aware. They are working overtime to find a solution to the problem of energy consumption as we speak. The foundations and concepts of Bitcoin is such that it seeks to improve the society in a better way.

At the end of the day, it should also be stated that Bitcoin mining consumes as much energy as all PlayStations in the world. Surely improving the world’s financial systems from collapsing ought to have some value.

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