Why Bitcoin (BTC) is more sustainable than you might think
One of the most popular arguments about Bitcoin is that it is unsustainable. At first glance, it seems that way. Cambridge University estimates that Bitcoin consumes around 60 terawatts of electricity, which is roughly equivalent to the energy consumption of Switzerland. Nevertheless, the conclusion that Bitcoin is not sustainable is unmistakable.
The volume of purchases has no impact on the amount of energy consumed.
Bitcoin’s energy demand, critics argue, is equal to the volume of transactions. This is a fallacy.
The number of Bitcoin miners determines the amount of energy consumed. There are network operators that process bitcoin transactions on the blockchain, bitcoin’s transaction network. They do this by using special mining machines that are available 24 hours a day, seven days a week.
Is it true that there are more transactions today than yesterday, but the number of miners remains the same? The energy input does not change as a result. Until there are more bitcoin miners, in which case the energy demand doubles. So, simply put, more miners equals more power.
What effect does that have on energy use? It could be the price of bitcoin. Bitcoin miners are paid a certain amount for each block of transactions they connect to the blockchain. The higher the value of Bitcoin, the greater the opportunity to start mining Bitcoins. Consequently, the exchange rate has an indirect impact on the number of Bitcoin miners and thus on energy demand.
Bitcoin mining is not really bad for the world
Bitcoin miners use a lot of electricity, but that’s not bad for the climate per se. In fact, it seems more like the opposite is true. Renewable electricity is used by 78 percent of bitcoin miners.
Bitcoin miners are concentrated in these areas for a reason. These provinces have affordable electricity and high-speed broadband. The low cost of electricity is due to a 30% overproduction of renewable energy in these areas. In addition, the northern provinces have mild winters, so there is no need to invest in air conditioning.
As a result, one could argue that bitcoin mining is the greener choice. Is there anywhere on the planet that generates renewable energy? Then mines come along, and the need for renewable resources keeps growing.
Alternative ways to make bitcoin more viable in the future
Data centers use a lot of energy. It increasingly comes from solar panels and wind turbines, but there’s a catch: what happens when the wind doesn’t blow and the sun doesn’t shine?
The cloud that permeates these data centers can’t just be turned off. Singapore claims it has a solution in the form of a green, hydrogen-powered data center.
A hydrogen plant could be an option. Where there is a surplus of solar or wind energy, a hydrogen plant converts it into a renewable fuel. When there is a deficit, the hydrogen can be converted back into electricity.
You waste a lot of energy, but it’s a minor problem because green hydrogen was abundant when it was converted. The framework demonstrates how data centers can become self-sufficient and no longer rely on fossil fuel electricity in times of shortage.
Artificial intelligence is another possibility. It is as necessary to reduce energy consumption as it is to ensure it is environmentally friendly. In recent years, data center operators have made great strides in this area. Every calculation in a data center can now be performed more effectively and with less power consumption thanks to artificial intelligence.
Because there are so many of these computations, even a small saving per computation adds up to a huge reduction in power consumption. This not only saves the operator resources, but also money. Sustainability also brings something in this direction.
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