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Board Bitcoin Discussion
Merits 79 from 35 users
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Debunking "Bitcoin is an environment disaster" Argument.
by
fillippone
on 20/03/2021, 21:55:09 UTC
⭐ Merited by vapourminer (10) ,Welsh (10) ,arulbero (5) ,Paolo.Demidov (4) ,DdmrDdmr (4) ,m.lov (4) ,ETFbitcoin (3) ,mindrust (3) ,Lucius (2) ,babo (2) ,NotATether (2) ,DooMAD (2) ,just_Alice (2) ,Daltonik (2) ,JayJuanGee (2) ,hosseinimr93 (2) ,usque_ad_finem (2) ,creep_o (1) ,Charles-Tim (1) ,pooya87 (1) ,aoluain (1) ,Daniel91 (1) ,orions.belt19 (1) ,kryptqnick (1) ,Coin-1 (1) ,Karartma1 (1) ,acquafredda (1) ,bitbollo (1) ,LeGaulois (1) ,tadamichi (1) ,dragonvslinux (1) ,philipma1957 (1) ,GazetaBitcoin (1) ,Coyster (1) ,joker_josue (1)
Recently I often heard bitcoin critics telling me that "Bitcoin is too polluting", "Bitcoin waste too much energy" or other similar arguments.


Those arguments have been debunked a few several times, but I am trying here to organise all the material to counter those accusations.

I will try to "answer" specific claims, with a few counterarguments, supported by data, websites and references. so that it will be easier to organise a "defence" of Bitcoin, in the unlikely case Bitcoin need a defence.

    • Accusation
      • Miners in China ravage the environment to produce Bitcoin. A large part of electricity production in China is made with fossil sources, especially coal, and the ecological footprint of Bitcoin is unsustainable.

    • Defence
      • Miners by their nature have an incentive to go in search of energy at the lowest possible cost. The energy market like any other is governed by the laws of supply and demand. The energy that is cheap is typically that produced in excess that otherwise would not be exploited and literally wasted.
      • Many miners are concentrated in large hydroelectric plants (for example in China) where the levels of production surplus are enormous and can thus obtain very low energy prices. Suffice it to say that in 2017, compared to 250twh produced by the Yunnan dams, 155twh were used (95twh thrown away, since they cannot be stored).
      • Recent studies show that bitcoin mining uses 39% energy from renewable sources (solar, hydroelectric, wind, geothermal, etc.) and 25% from energy derived from nuclear power and, to a minimum, fossil fuels. This percentage is steadily increasing, especially in China, where the transition to low carbon footprint production is happening more rapidly.
      • Bitcoin helps the efficiency of the energy industry,for example it can help prevent "Renewable Curtailment" as well asmaking it profitable to capture gas otherwise destined to be burned in gas flaringwhich encourages producers to reduce carbon emissions. Low-carbon energy projects such as hydroelectric, nuclear or renewables can be made profitable by selling the excess energy produced to the mining of bitcoin.
      • A very large part of the energy produced is not used correctly, partly because it despairs in unprofitable uses (dispersion in networks, thermal dispersion in endothermic engines etc ...) partly because it is produced in places or moments where not necessary (eg: power plants off-peak nuclear power plants, etc). Well, in this space, Bitcoin can make a huge contribution, by efficiently using resources that would otherwise be wasted.

        Quote
        Notice that rejected energy accounts for around two-thirds of all electricity generation. This energy is produced but ultimately does not go to useful work. The amount wasted annually is around 66.7 quadrillions BTU’s (“quads”) of energy.  For perspective, that is the energy equivalent of wasting 2.3 billion metric tons of coal every year.

        Quote
        The potential for Bitcoin-powered renewables is already evident in China. A 2019 report by Coinshares found that approximately 75% of Bitcoin mining comes from renewable energy sources, much of which stems from newly created hydroelectricity. These new revenue streams have brought power plants online which otherwise would not have been economically viable given existing
        .




    • Accusation
      • The Bitcoin network is maximally inefficient. PoW leads to the consumption of a huge amount of energy for each Bitcoin transaction if for example, we compare it with VISA.

    • Defence
      • The energy consumed by the Bitcoin network is also used to secure it, since an attacker who wants to try to destroy Bitcoin would have to use (therefore buy or produce) a higher amount of energy compared to that used by the Bitcoin network.
      • Il PoW is efficientand mining is a highly competitive industry. Any slightest energy inefficiency is punished by lower profitability. This guides miners towards the highest possible efficiency.
      • The cost of mining is not the energy cost of transactions, and certain metrics they claim to compare eg. the cost of a single bitcoin transaction with the energy consumption of a transaction on the Visa circuit are completely meaningless. The mining mechanism serves precisely to make the system safe (from double-spending to other possible attacks on the network) in a trustless network, i.e. without a central authority that effectively updates the ledger. The only honest comparison would be with the overall cost of circuit security systems and banking systems. How much is spent globally each year to make banks and payment systems safe and reliable? With all the dedicated servers, data centres, network infrastructures, procedures constantly running for authorization, settlement, clearing, reconciliation, etc. Not to mention the costs for the construction, operation, maintenance and surveillance of ATMs, bank branches, vaults and related security systems, etc.
      • In a very well written article by Conio's Guido D.Assori (who signed the very first Segwit transaction) says this is a feature, not a bug.
        Here a courtesy translation of this specific part of the article.

        Quote
        The third attack would be that Bitcoin would move 7 transactions per second and that in a nutshell for such a system even a few kilowatts now would be wasted (curious, then, that Attivissimo remembers this after accepting Bitcoin donations for years, on its blog, of this great problem).
        Quickly: this number, unfortunately, arises from a profound misunderstanding of the real decoupling between the technological infrastructure called "blockchain" and the transfer of value in Bitcoin.
        It is frequent, but this does not make it any less wrong.
        Premise: "It's a feature!", Or rather the size of the Blockchain is deliberately small.
        Being able to write on a blockchain must be a luxury, so that it remains decentralized, so that everyone, at any time and with a relatively low effort, can independently verify the correctness of transactions on the network, and not just the large banking institutions.
        However, nowadays, at every moment of the day, Bitcoins, or contracts that are related to their value, are brokered and traded on cryptocurrency exchanges, on custodial platforms, by means of pegged tokens, on sidechains, on Lighting Networks, by means of CFDs. , with various levels of enforcement.
        And this happens through a number of transactions that are much more than 7 per second, believe me! Claiming the opposite would be like expecting our morning coffee paid for at the bar to be recorded by all the backups of all the nodes of all the Eurozone interbank circuits.
        So how many transactions, really?
        In general, it is a non-measurable number, and it will be less and less, the estimates will be more and more heuristic, also thanks to privacy-preserving platforms.
        We can say, to give a general idea, that every transaction that takes place on an order book of any platform, which represents Bitcoin, can only exist thanks to the fact that, underneath, there is the Proof Of Work which, when necessary, allows settlement of a precise state of a chain of transactions of indefinite length (my token goes to you, you give it to him, you give it to the other, who breaks it in three and gives it to the other, who collects 8 ). Aren't you going to expect all the coins you exchange to end up written down somewhere?
        Quite simply, people every day rely on intermediaries to exchange Bitcoin value without using a blockchain directly.
        The global concept of decentralization is maintained, relocation is increased with confidence in the last mile (not always! LN!) But the connection element always remains the last, only, true, mandatory, a digital ledger in which the compensation movements.
        Comparing, therefore, the phantom 7 transactions (which is a number that was good in 2013, today there are many more even on-chain) to the world's ability to transact Bitcoin, and tie it to the PoW, is a bit like expecting that there are, at all times, a sufficient quantity of vans to move all the gold in all the vaults of the world that intend to exchange gold.

        Bitcoin is not a payment system, but a settlement system. Therefore, the comparison should not be made with payment circuits (Credit Cards), but with the various settlement layers (SWIFT, CHIPS, FedWire ) o Fedwire.
      • Similar considerations can be made for a comparison between gold and bitcoin as "digital gold", and then in addition to the costs for the safe custody of gold, those for its mining, refining, smelting, transport, etc. should also be added. I challenge anyone to argue that all this can be considered particularly "green", but strangely I have never heard anyone complain and ask to ban gold for its environmental impact.

If you have any other suggestion, please point me in the right direction, and I will try to address every issue.