This is true! Environmental disasters, systemic pollution and the resulting inefficiencies are a serious problem. Obviously, people do not want to live in toxic wastelands, and the quality of life of people is improving compared to the cleanliness of the ecosystem in which they live. If the world gets too toxic, we won’t be able to live, and it will be … well … bad.
However, the benefits of industry were purely positive for humanity as a whole; creating efficiency in the way we eat, sleep, travel and grow as a species. Through manufacturing processes, we can focus more on art, culture, philanthropy and civic affairs. Industry has met most of the world’s basic needs and continues to do so with greater efficiency where freedom flourishes.
So a return to unsystematic, pre-industrial farming is somewhat romantic, but ultimately undesirable because too much of the world will starve to death and the other costs will largely outweigh the benefits. However, in the face of the bull run and the NFT boom, environmental activists have again criticized Bitcoin’s industrial infrastructure, under the assumption that proving the building blocks are a waste of electricity.
Is Bitcoin a Waste Use of Energy?
Of course not! Each system has financial and environmental costs, but how many systems measure practical ROI?
People are focusing on bitcoin consumption, not Visa, for example. Have you considered what Bitcoin can create per kilowatt versus what a centralized economy can do with the same kilowatt? All systems have consumption that is repurposing in an attempt to create additional value so that efficiency can be sold to the world for profit. But the real question should be whether more profit can be made using Bitcoin as an efficiency tool rather than other existing solutions.
The Bitcoin protocol is already more efficient than Visa on a very fundamental level, so why don’t we measure the cost of Bitcoin per kilowatt? The reason is that BTC is the most well-known implementation of a Bitcoin-style network, and legacy protocols like Ethereum take up the rest of the mental bandwidth of the blockchain economy. Both networks are massively (and arbitrarily) ineffective, but they are popular due to the asymmetry of information available in the market.
But that’s another point, because the current mainstream economy relies on huge data centers that are also incredibly energy intensive. They function as a product of indirect incentives to maintain the Internet infrastructure as the backbone of the modern economy, and they use power that people simply accept as the basis for maintaining their standard of living. They do this because electricity consumption versus economic output is extremely difficult to measure, and the incentives to be “greener” are kind of mixed.
Since all metrics are tied to complex mathematics, it’s easy to forget about them!
How is Bitcoin green?
Before computers, energy consumption in relation to total profit was considered a fixed cost because it was difficult to change and even more difficult to accurately measure. Thus, a business plan can only consist of estimated costs and estimated revenues, and entrepreneurs will try to balance them in order to generate some profit. If something works, business moves forward, but the incentive to increase something like energy efficiency is not really felt by industrial consumers, who were initially competitive but were not often inclined to cooperate. Before Bitcoin, most industries had only marginal incentives to partner with their competitors, and were not stood in the way of layers of ineffective bureaucracy.
Bitcoin changed this. For the first time in world history, the best competitor will be in perfect balance with his ability to be the best employee, as well as have a direct and calculable incentive to find proximity to the world’s most efficient energy source.
This had three main effects:
- Honest nodes huddle near cheap energy sources.
- An exponential increase in the efficiency of computer technology specializing in the creation of the supercomputer inherent in bitcoin.
- An incredible amount of collaborative research on efficient power generation and processing.
Without Bitcoin, there is much less financial incentive to improve computational efficiency and value transfer, and when incentives are low, things remain the same. People needed the incentives and gamification of the race to use power more effectively! Bitcoin has created this incentive and the world is starting to reap the benefits as industrial miners recycle electricity into greenhouses and generally explore new ways to generate energy.
As Bitcoin absorbs more and more of the centralized economy, the inefficiency of poorly coordinated networks will give way to the efficiency of the much more coordinated production of value that Bitcoin offers.
Imagine a day when the infrastructure of Visa, Mastercard, PayPal, Venmo, ACH, Swift, FedWire, Western Union, MoneyGram and everyone else was replaced by Bitcoin. The world not only benefits from instant payments, 10-minute settlement times and instant confirmation of all actions, but also from the incredibly small and efficient carbon footprint of Bitcoin’s honest nodes.
But isn’t Bitcoin consuming too much energy?
No, but there is BTC! The hashing power of SHA256 (Bitcoin mining algorithm) is wasted on BTC by fools and crooks chasing a juicy block subsidy. Under the umbrella of enhanced security, hash power is at an all-time high and consumes an absurd amount of power, while the network can only handle six megabytes per hour. Plus, the difficulty with BTC is actually a security issue! If a significant number of mining machines were suddenly shut down, the network would be unable to find the block, causing the network to stop. Since the BTC nodes are poorly connected, mostly behind TOR and pulling a fragile political line with them in places like China, such an incident with BTC is plausible.
So yes, BTC is extremely inefficient and wasteful.
However, unlike it, Bitcoin SV (which has SHA256 global availability) is capable of performing virtually unlimited financial transactions and valuable data per hour and, due to its more competitive nature, opens up more specialized transaction processing business models. Instead of purely competing for block rewards, BSV creates opportunities to leverage a small amount of hashrate when providing value-added services such as highly connected data services, asymmetric computing, or mission-critical archival storage. So, for a fraction of the cost, Bitcoin SV can handle orders of magnitude more payments and data around the world, and that’s the point.
We don’t need four credit card companies, thousands of banks, dozens of regional and international settlement systems, and 6,000 “cryptocurrencies.”
Bitcoin SV can really replace ALL payment systems in the world, eliminate the need for immeasurable energy consumption and introduce direct incentives to ensure that there are no arbitrary losses in the entire global economy. At the same time, providing near-perfect solutions for identity, property rights management, personal and business data protection, and seamless integration of physical and digital lifestyles on the blockchain.
This is a goal worth pursuing for the sake of the planet and for the sake of profit! And this is what will allow you to really do important things on all fronts. So next time you will be looking for green technical solutions for all the world’s problems. Let’s start with Bitcoin SV. This is the only tool that can replace EVERYTHING.
New to Bitcoin? Check out CoinGeek Bitcoin for beginners See the Complete Resource Guide section to learn more about Bitcoin, as Satoshi Nakamoto originally envisioned, and blockchain.