Bitcoin is not worth the energy

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11:45 a.m.

Why use renewables and wasted energy to power Ponzi schemes?

by Greg Barker

Bitcoin mining has reached the Arctic Circle

If your primary goal as a publication is to uncover “the unintended consequences of digital trends,” then Digiconomist hit the jackpot when cryptocurrency hit the mainstream. Kicking off 2022 on a high note, the tech blog shared on Twitter last year’s results of its “widely cited” clues that tracked Bitcoin’s gigantic energy waste:

Some statistics to start the year:

In 2021, Bitcoin consumed 134 TWh in total, which is comparable to the electrical energy consumed by a country like Argentina.

The associated CO2 emissions were approximately 64 Mt; sufficient to offset all of the global net savings resulting from the deployment of electric vehicles.

– Digiconomist (@DigiEconomist) January 1, 2022

This would harm Bitcoin’s status in the public eye, especially since it was once considered by enthusiasts to be the ‘gold standard’ of cryptocurrency. Now he is now losing favor with anyone who fails to convert to “Bitcoin maximalism” adopting other tokens.

These tokens, of course, still have limited functionality. It’s hard to buy or sell anything other than links to JPEG images, virtual land, game characters, and other cryptocurrencies – which also have no real-world application, but at least these have more “utility” than Bitcoin. Meanwhile, the dying crypto star can only handle seven transactions per second, twice slower than rival Ethereum and more than three times slower than Western Union transfers a decade ago. So, claiming Bitcoin is “the future of finance” is a bit like trying to sell Sony’s 1992 Minidisc Player as an iPod killer.

Yet despite the unfavorable coverage, Bitcoin maximalists are dedicated to the cause. When several years are spent building an identity around a cult object, you will not leave without a fight. Since Bitcoin does not function as a currency, store of value, or “inflation hedge”, maximalists have gone on a last ditch effort to design a pragmatic use case, this time: “wasted energy” .

The idea is that Bitcoin miners will consume unused energy from sources other companies cannot use, including hydropower, flared natural gas, and even volcanoes. Capturing wasted energy appears to be able to legitimize Bitcoin mining. But that is until the public finds out that you have used fuel to mine cryptocurrency, instead of allowing other entities to develop methods to capture that excess energy for productive use. .

It’s unclear why the company would allow flawed technology to add additional stress to climate goals, especially when cheap, renewable energy sources might be scarce.

That said, even if Bitcoin were to become a net positive for the environment, there would still be little justification for its other destructive qualities, like the way it has elements of both the Albanian-style pyramid schemes of the 1990s and the Multi-level marketing scams. It’s hilarious to assume that governments will embrace crypto as a cleaner for the environment when it is backed by what is known as ‘Ponzinomics’: a fraudulent scheme which, in this case, pays out to its early adopters. (Bitcoin miners) while generating zero money. flow or income for holders of real assets (Bitcoin holders).

If the Bitcoin ad machine somehow markets wasted energy as a genuine use case with success, we could see global power structures embrace a carbon neutral Ponzi scheme.

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