Bitcoin’s (BTC) energy consumption has been taken out of context, says crypto expert
A crypto expert pointed out any modern technology requires power to operate, which is bound to increase over time.
Tue, 16 Mar 2021, 15:41 pm UTC
Crypto adoption has surged in recent months as the rally attracted more investors into the new asset class. But many are also increasingly concerned that the sky-high prices of popular cryptocurrencies such as Bitcoin (BTC) and Ether (ETH) will also cause a surge in mining activities, reigniting fears of their harmful effect on the environment.
Bitcoin’s rally, which saw the crypto rise by around 890 percent in a year, has reignited concerns about BTC mining’s environmental impact due to its huge energy requirement. However, crypto mining experts argue that the issue might be a bit overblown.
While various researchers say that the energy used in mining Bitcoin worldwide is comparable to the energy consumption of an entire country, estimates vary greatly as to how much electricity the activity consumes. For instance, University of Cambridge researchers say that BTC networks consume 127.7 terawatt-hours of electricity annually, which makes it higher than Argentina but Digiconomist places the figure at just 79.3, comparable to Chile’s consumption, according to Business Insider.
Dan Held, head of growth at cryptocurrency exchange Kraken, argues that the Bitcoin network’s energy consumption has been taken out of context by critics. “What it really comes down to when people don't like bitcoin's energy consumption is...they simply don't like Bitcoin,” Held said. “And so people that are against crypto think that any energy consumption from Bitcoin is wasteful.”
Any modern technology requires energy to function and it’s understandable for its power requirement to eventually increase over time, according to Held. He even estimates that the world’s banking system uses over 650 terawatt-hours of energy each year, which is several times bigger than Bitcoin mining.
Meanwhile, Blockware Solutions CEO Mason Jappa explained that crypto miners are financially incentivized to make efficient use of energy sources. He noted that some US rigs are powered by “gas-flare recapturing,” a process where BTC miners recapture natural gas flared into the air during its extraction, and use it to power their crypto mining. As a result, they get the cheapest electricity possible while using energy that might have otherwise gone to waste.
More miners are also becoming aware of their environmental responsibility and are moving towards using more sustainable energy sources. Aroosh Thillainathan, CEO of Northern Data, revealed that its computing centers in Canada, Norway, and Sweden are powered by renewable energy.
“I'm a big believer in the bitcoin itself,” Thillainathan said. “It's a great way to store your wealth...but as an infrastructure provider, we have to move to be as environmentally friendly as possible.”
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