The discussion about electricity and bitcoin power consumption spanned several sessions at The B-Word conference. Consumers use industrial products like refrigeration, air conditioning, heaters, dryers and washing machines, but don’t think critically about the energy needs of those industries, said Nic Carter.
Bitcoin miners consume 0.26% of the world’s electricity production. At the same time, support for the cryptocurrency industry is increasing as the sustainability and value of bitcoin increases, several speakers, including Elon Musk, Jack Dorsey and Nic Carter, said at The B conference. -Word Wednesday.
These same miners also consume 0.11% of global energy production, according to 2021 data from the Bitcoin Mining Council.
The discussion of electricity and bitcoin power consumption spilled over into several sessions during the conference with some speakers focusing on the details of mining itself and how energy is consumed in the process.
The devil is in the details
“Historically, the vast majority of bitcoin’s energy expenditure has come from (initial) issuance,” said Nic Carter, general partner of Castle Island Ventures and co-founder and chairman of Coin Metrics, in the “Demystifying Bitcoin” panel during of the event.
“It is not the case that adding transactions will increase the energy expenditure of the bitcoin network, as many people mistakenly believe. The bulk of the energy consumption is the price of bitcoin and the value of news. emissions that miners collect, not the number of transactions, ”Carter said.
Most of the energy expenditure, in the case of bitcoin, is related to the initial creation, he added. However, in terms of the actual composition of the energy inputs, it is more difficult to assess because it is difficult to know if the miners use renewable energies to power their equipment.
“There appears to be a positive energy trend for bitcoin,” Musk said during the “Bitcoin as a Tool for Economic Empowerment” session, where he was accompanied by Jack Dorsey, co-founder and CEO of Twitter, and the founder and CEO. de Square, and Ark Investment Management CEO Cathie Wood.
In the past, Musk has flipped between supporting and denouncing bitcoin due to environmental concerns.
But in today’s panel, he said he was a bitcoin supporter and owner of the digital coin. However, he added that monitoring bitcoin’s power consumption was important.
Still, he said he sees a positive shift in the mining industry towards renewables and said buyers of Telsa could pay again using bitcoin. “I want to do a little more due diligence to confirm that the percentage of renewable energy use is most likely equal to or greater than 50% and that there is a tendency for that number to increase,” he said. -he declares. “If this is the case, Tesla will most likely start accepting bitcoin again. “
Musk insisted that he hopes to see bitcoin succeed, and renewables will be a big part of that.
Dorsey noted, “Bitcoin also drives a lot of innovation in the energy field and only looks at unused energy. Imagine all the unused energy that is wasted each day. “
Compare apples to oranges
While bitcoin can increase the number of transactions or the value of transactions, it does not have a linear proportional effect on the energy miners consume, Carter said.
Additionally, bitcoin’s power consumption is 12 times lower than that of electrical devices that are always on in American homes, according to a report from Galaxy Digital. So each microwave or refrigerator that stays on all the time uses 12 times more energy than bitcoin.
Source: Nic Carter, The B-Word, July 21, 2021
That’s not to say these devices aren’t useful, Carter noted, “but it’s about contextualizing bitcoin to compare it to other uses of energy at the industry level.”
The subjective view of the usefulness of an application changes the way they perceive the product. If someone can’t find value in an app, they’ll think it’s wasteful as some think bitcoin is.
Often consumers use industrial products like refrigeration, air conditioning, heating, clothes dryers and washing machines, which greatly improve our quality of life, so we do not often think critically about energy needs. of these industries, Carter added.
“We don’t regret the energy that is used on them, in the same way that we should not regret the energy used for this new money transmission technology. This is just the mark of civilizational progress, getting more energy and using it in efficient sources to improve our lives, ”Carter said of bitcoin.
Separately, Musk addressed a similar note. “It makes sense to support something that improves the quality of the way we run the economy, (and) bitcoin is a candidate for that,” he said.
In the long run, renewables “will be the cheapest form of energy. But it doesn’t happen overnight, ”Musk said.