Energy consumption is among the things giving Bitcoin a bad rap. Since the Bitcoin system is transparent, anybody can calculate the amount of power it uses by checking its hash rate. The hash rate is the computing power that sustains the Bitcoin network. And with this information, Bitcoin antagonists extrapolate this cryptocurrency’s energy consumption. They conclude that Bitcoin aims to destroy the climate and roll back the sustainability gains humans have made over the years. Using energy efficient trading tools like granimator can be a great initiative towards energy consumption issues.
Bitcoin’s proof-of-work mechanism consumes a considerable amount of energy. However, some people spread misconceptions about the actual state of affairs. This blog post debunks common misconceptions about Bitcoin’s energy consumption.
Bitcoin Mining Carbon Footprint is Large
Bitcoin mining’s carbon footprint compares to Colombia’s. The global carbon emission ranks Colombia’s carbon footprint at position 45. Ranking first, China emits 125 times more carbon two oxide than Colombia. While natural gas flaring has no benefits, the excess energy lacks use and has a ten times larger carbon footprint than Bitcoin.
Bitcoin Mining is Harmful to the Power Grid
Miners can shut down their mining rigs on short notice. That means they can quickly react to emergency demand for electricity. Bitcoin mining is suitable for the power grid because it helps producers smooth out demand.
Bitcoin Mining Crowds Other Sectors to Increase Electricity Cost
Crowding other sectors to increase energy costs is a myth since Bitcoin incentivizes miners to use cheap energy sources. Most miners don’t compete for electricity demand with retail consumers. Additionally, failing power grids because of excess demand happen because of market feedback. Bitcoin miners’ feedback is valuable. They can even pay taxes to overhaul the power grid.
Bitcoin Mining is Wasteful
Even if Bitcoin mining consumes a significant amount of electricity, it is not a challenge if there’s an abundant supply of clean electricity. And humans have to solve this challenge even without mining Bitcoin. Additionally, Bitcoin competitors in the crypto market are no better regarding their environmental impact. Running several bank branches and mining gold have more giant carbon footprints than Bitcoin mining.
Every Bitcoin Transaction Uses a Significant Amount of Energy
Mining all Bitcoin blocks requires the same energy amount regardless of the block space. Consequently, this conflates the notion of overall and marginal energy usage. Measuring Bitcoin energy usage linearly is impossible.
Bitcoin Mining Won’t Become Green
More Bitcoin miners are turning to nuclear energy and natural gas. The amount of Bitcoin miners generate using coal ranges from 30% to 50%, although the trend is unclear. Hydroelectricity energy mining is currently in a slump. However, it has been there in the past and eventually recovered.
Bitcoin Mining Hurts the Vulnerable Communities
Some people argue that Bitcoin mining exploits economic instabilities, access to cheap energy sources, and weak regulations. However, most miners need to provide market feedback. A solution to this issue is not banning market participants but improving market rules.
Proof-of-Stake Doesn’t Have an Energy Burden
Some Bitcoin critics argue that an alternative consensus mechanism called Proof-of-Stake is more efficient. Proof-of-Stake uses less energy while providing an alternative to those focusing on energy consumption. However, it has its drawbacks, especially in centralization that Proof-of-Work avoids. Proof-of-Stake uses crypto holdings or stakes to determine governance. It rewards validators with additional stakes. From a security standpoint, this is a complex system.
Additionally, it centralizes crypto governance in those with the most stakes or willing to purchase it. And this invites numerous issues, including exclusion, cultural elite rule, and censorship.
Some people have exaggerated Bitcoin’s energy consumption. They have framed it inaccurately to discredit this cryptocurrency’s value. Unfortunately, this trend might continue if the mainstream media run anti-propaganda. Luckily, Bitcoin believers understand this cryptocurrency’s vital role in the world and its potential to change the financial sector.