My brother posed a tough question on Zoom recently.
How could I, as someone working in the cryptocurrency industry, justify bitcoin’s energy footprint in the age of climate change?
Didn’t I used to write about global warming and the dangers it poses? (I did).
A lot of people are having some version of this discussion at the moment.
I replied as many people working in bitcoin do: It’s not as bad as the mainstream media says. The fiat money system also uses a lot of energy. It’s going to get cleaner as renewables come online.
Later, I wished I’d framed it differently.
What I really think is 1) bitcoin is currently dirty but ultimately worth it and 2) technology will fix the problem. Let me explain.
Bitcoin is worth it because it is a fundamental innovation with many uses in itself and for humanity at large. Shutting it down now, as some would like to do for climate reasons, would be like stopping car development with the Model T. You have to give it time.
Technology will fix the problem because that’s what technology does. In fact, it might already be happening.
As CoinDesk’s Michael Casey wrote last week, there are lots of promising experiments underway to co-locate bitcoin mining with renewable energy production, funding the latter while cleaning up the former. Even more interestingly, bitcoin has potential as a “money battery,” soaking up excess renewable power where it can’t be consumed and transferring it to where it can be used effectively.
The takeaway? This debate needs to move on. We need to stop arguing about the exact size of the bitcoin energy issue or about whether it’s really a problem and start talking about what we’re going to do about it.
The best place to start is the grid itself and incentives to lower the cost of electricity. If renewables are cheaper and more plentiful, everyone, including and especially miners, will use them.
In tandem they could really fund a new generation of cleaner energy while also bringing a new form of money with myriad benefits for the world. What about, say, extra tax credits for renewable producers that work with miners?
The problem isn’t a lack of power to run everything. It’s a lack of coordination in using that power efficiently and where it’s needed. Bitcoin is a burden but it’s also a possible fix. Let’s embrace the challenge rather than run away from it.