We all heard stories that Bitcoin spends energy like Switzerland, and that all contributes to global warning a lot, but is all that true?
No, it is all myths and twisted repetitions we here from journalists who are just trying to get more attention.
Let's take a look what is reality and what is myth.
First myth: EnergyMost articles use word ''energy'', but only thing that matters for Bitcoin is electricity. For example
this Vice article
Energy should not be mixed with electricity, for example we can have several energy sources in our houses including gas.
Does Bitcoin transaction consumes electricity, gas and gasoline?
Then we can see in
this BBC article, they say how Bitcoin consumes energy equal of Switzerland.
If you don’t drive a car or you don't have gas at home, energy consumption means only electricity for you, but you can not say the same thing for whole country.
Electricity is only around fifth of the world’s energy, but we don't use any fuels for Bitcoin transactions.
Myth Two: It will only get worseIt is opposite from that, and Bitcoin will probably burn less electricity in the future.
There will be total of 21 million Bitcoins, and every four years there is reward halving, and after the last halving, it is now 6.25 BTC.
In order to burn the same amount of electricity, the price of bitcoin must double in dollar value every four years.
In
this article from journal Nature they say that Bitcoin would warm the planet by 2°C by 2033.
They don't explain how exactly in article, but they just assume that more electricity will be burned. If we divide their numbers, and pay the miners, one bitcoin will have to be $160 million in 2033.
Looks like myths are spread by journalists and scientists too.
Myth Three: A Comparison of the Incomparable''The carbon footprint of a single transaction is the same as 780,650 Visa transactions,'' says
this article in The Telegraph.
Problem here is that journalist are comparing average cost of Bitcoin with the marginal cost of Visa.
Should we also take the cost of all world banks, employees, cards, terminals, etc. and divide it by the number of transactions?
Bitcoin transactions may not be as cheap, but monetary system is also not cheap, and in case of Bitcoin we have full control of our money.
Bonus Myth: It’s uselessThere is now over 18.5 million mined Bitcoins since 2009. How much energy did it cost us to create those bitcoins?
We can never know exactly, let's take the number from authors calculations and around $200 billion.
It’s a lot of money, but that is only about 2% of the US Federal budget for social security, or 3% of US Federal defense spending, or 4 presidential elections in the US.
No wonder mining is concentrated in places with excess electricity, like oil extraction sites or hydropower plants in China.
We do not want to waste scarce resources but no need for inventing myths and fairy tales around this subject.
Information is used from original trezor blog and Dominik Stroukal:
https://blog.trezor.io/three-myths-about-bitcoins-energy-consumption-ef613a1f3d5
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