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If only the media has something to scandalize about. Nowadays average journalists happily and readily pass seemingly hot topics around amongst each other without really caring about delving into the matter at hand. As long all of them follow the herd, they cannot really do things wrong. As the average journalist knows all too well, doing things wrong, is truly a wrong thing to do.

While these journalists therefore eagerly strive to not do anything wrong, they point fingers at one group of people that currently messes things up on a global scale: Bitcoin miners and with them every Bitcoin user on this planet. In the average journalists’ eyes, Bitcoin is slowing the effort to achieve rapid transition away from fossil fuels. Because maintaining this Bitcoin shenanigan devours fast amounts of energy and seems to be having an ever-growing climate footprint, the average journalist feels obliged to write against this newly arising threat to humanity.

Predictions are just predictions

Bitcoin’s current estimated annual electricity consumption is around 37 TWh, which is more or less equal to Qatar’s annual electricity consumption. Countries like Ireland, Hungary or Denmark have already been passed by Bitcoin’s mining operations when it comes to energy consumption. Because of this, some people reason that by July 2019, the Bitcoin network will require more electricity than the entire United States currently uses. By February 2020, it will use as much electricity as the whole world does today.

These kinds of predictions sound quite daunting. Fortunately enough, predictions such as these are just predictions. Although such predictions are usually given a scientific appeal, so that they might seem more convincing, wrapping forecasts up in scientific words mustn’t necessarily mean anything. As history shows, there are many examples of so-called experts, who did not only fail to predict the future but were shamelessly proven wrong by it. Most prominently, the Club of Rome was going down in history for repeatedly predicting the peak of oil – a peak that has not yet been reached.

Another famous example are predictions about limits to population growth. A couple of decades ago many renowned “experts” on this field predicted that the world will inevitably meet its population limit soon. One of the most illustrious pundits was Paul R. Ehrlich. In his book “The Population Bomb” he states things like “I don’t see how India could possibly feed two hundred million more people by 1980” or “I have yet to meet anyone familiar with the situation who thinks that India will be self-sufficient in food by 1971”. When sentences like these were written by Ehrlich, India had around 400 million people. Today India has almost 1.2 billion people and Ehrlich has been proven awfully wrong.

Predicting the future with certainty is just impossible. Our world is made up of way too many variables, of which many of them are unknown to us. The world is also changing – another reason why predictions are inherently unstable. Although something seems to follow a particular path does not mean that it must always continue doing so. Just because Bitcoin mining is currently growing in energy consumption is no reason to believe, it will grow ever more. Because human beings are vastly creative creatures, it’s a good bet that the technology for producing energy will also change and possibly draw Bitcoin mining and its energy consumption into entirely new directions that we cannot even think of today. A funny but spot-on analogy that puts the worries and fears produced by many Bitcoin energy consumption articles into proper perspective is given in a twitter post by Bitcoin enthusiast Andreas Antonopoulos: “Madam, I’m concerned about the progress of your pregnancy. At the current rate of growth, your belly will be the size of this building in just 5 years”.

Comparing at will

Predicting future horror scenarios about Bitcoin mining is only one way of trying to discredit it. Another one is drawing up comparisons that make Bitcoin mining seem irresponsible. Just to be clear: It is not denied that Bitcoin uses up vast amounts of energy. But as we argued in a different article, these great amounts of energy are being consumed with a purpose.  It’s this purpose that is usually overlooked when making the admittedly shock-evoking comparison that Bitcoin mining is using more energy than 159 countries. Considering that there are 195 countries in total on your planet, a number like “159 countries” does sound impressive. Nevertheless merely adding up countries and comparing their energy consumption to Bitcoin’s is not the only valid comparison at all. Making just a minor change to the list of countries chosen would alter the entire picture. Since the 159 countries are either small or underdeveloped countries, swapping just one of these countries for a middle-sized, developed country would boost the 159’s energy consumption to a much higher level than what is used by Bitcoin mining. So any of these comparisons can be made up at will. Just as much as one can show that Bitcoin uses a lot of energy (by comparing it to a chosen amount of 159 countries), the case can be made that Bitcoin mining operations consume only 1/14th of the power lost to residential devices on standby in the U.S., i.e. household devices that are essentially just remaining on standby and are not actively being used. Against this backdrop, it is probably a wise thing for readers to take comparisons of any sort with a grain of salt. Usually, if statistical comparisons are being presented, it’s safe to assume that the comparison’s presenter has deliberately chosen the comparison so that it might rather serve his ends.

You dirty Bitcoin!

Although the average journalist criticizes Bitcoin for its high energy consumption, it’s not its mere height but rather the degree of fossil fuels being used to power Bitcoin, which offends him most. While the political world community is striving – rather desperately – towards cleaner energy usage all over the world, Bitcoin miners don’t seem to give a fig about this goal, the average journalist laments.

Again it’s not denied that Bitcoin mining is also using energy from burning fossil fuels to power the Bitcoin network. But exclusively focusing on this type of energy consumption misses a very interesting point. As a matter of fact, a major characteristic of Bitcoin mining is its geographical independence, which essentially means that Bitcoin mining is not bound to certain geographical locations. Bitcoin mining can occur anywhere, especially since there are now satellites up in space that can beam the relevant Bitcoin data down to every single part on planet earth.

Because Bitcoin is geographically independent, its energy can come from any source like wind, solar, hydroelectric, gas, coal or nuclear energy. Now, although energy itself is fungible, energy production methods are not. Fungibility related to energy production means that energy production facilities have different properties. For instance, solar energy facilities produce more of its energy during the day and less at night. Oftentimes what is being produced by solar energy facilities does not match what is needed and therefore consumed. When cities consume the greatest amount of energy, which is at around 8 or 9 p.m., solar panels produce almost no energy. Such mismatches can heavily weigh on solar energy producers because they have already put their capital to work, incur overhead costs but produce energy that is not really needed at the moment and can therefore not be sold. In the long run, this is surely a money-losing game. This is why many potential solar energy producers don’t want to take this risk of even starting their business, which again slows the process of migrating to renewable energy sources.

Bitcoin’s green potential

This is where Bitcoin mining comes into play. Because Bitcoin mining operations are geographically independent, they can more easily – than probably anybody else – deploy their mining facilities close to places where energy is produced in abundance and would, therefore, be wasted, if it were not for Bitcoin mining facilities to consume this energy and use it to power the Bitcoin network. This is a win-win situation. Bitcoin miners have the energy to power the Bitcoin network and earn income thereby, solar energy producers find willing customers for their energy, which helps them depreciate the capital expense of building their solar energy facilities at a much faster rate than they would be able to do without any Bitcoin miners.

So at the end of the day, Bitcoin mining does not only increase the potential of running a solar panel for profit, it also helps amortize applied capital much faster. This, in turn, increases the likelihood of solar energy investment and therefore speeds up the process of renewable energy adoption. Because the Bitcoin mining business is one of the most competitive industries nowadays – when done right, immense profits can be reaped – at the margin, Bitcoin miners try to be as efficient as possible, which also means they will try to get energy as cheap as possible. Because solar energy is often produced abundantly as explained above, it does play an important part in Bitcoin mining’s energy consumption.

Pointing out the undeniable potential Bitcoin has to spur the green energy revolution is usually countered with one immediate objection: How can Bitcoin be seen as contributing to cleaner energy usage, when most of the Bitcoin mining facilities are located in China – the world’s biggest polluter?

As we have seen already, such energy objections against Bitcoin are not entirely invalid, but they do only tell half the truth. While China still does produce vast amounts of energy with coal and Bitcoin mining farms certainly profit from it, China is currently shutting coal mines and is planning on cutting 1.3 million coal mining jobs. The Chinese are currently in the process of spending $367 billion on renewable energy by 2020. It is China’s declared goal to make renewable energy 20 percent of its total energy supply by 2030. Although these statements and actions come from politicians and should therefore always be taken with a grain of salt – as any statements of intent by politicians – it’s an interesting fact that is quite often overlooked as well.

So it should be obvious that Bitcoin mining is not the ultimate green energy panacea. But bashing Bitcoin mining for its energy consumption without considering its green energy potential – as the average journalist does – is not illuminating at all. After all, there might be one way the energy used for Bitcoin could be used more wisely: To enlighten the average journalist.

Image: Fortune.com

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