Countless myths surround Bitcoin, as the rise of the leading cryptocurrency has pleased plenty and arguably rubbed others up the wrong way. Plenty of mainstream media outlets have taken aim at Bitcoin, jumping on minor stories and using them to create myth and rumor. For that reason, it’s worth looking at these statements and effectively debunking them. Today, we are looking at power, specifically the belief that Bitcoin – to function, operate, and be mined – requires a huge amount of energy consumption.
Don’t believe the data
When it comes to Bitcoin and energy consumption you need to deal in facts. So, on a base level it is fair to say that Bitcoin is not – at least in its current form – an energy-light commodity. For mining Bitcoin on a mass-scale, thousands of ASICs (Application-Specific Integrated Circuit) – hardware designed exclusively for mining cryptocurrencies – are required to handle the graft work. A large percentage of this takes place in China, a region that still generates a large proportion of its electrical power through fossil fuels, which raises even more questions.
Another factor that appears to contribute to the myth is that many of those bashing Bitcoin’s energy consumption are doing so off non-existent or somewhat questionable statistics. Digiconimist does keep stats on Bitcoin’s energy usage, with these numbers seemingly being the root of most so-called reports on the matter. These stats show that Bitcoin’s overall energy consumption is 30.2 tWh, across 63 countries, with a Bitcoin transaction taking a similar amount of power as that of 10 US households on a daily basis. However, these stats are becoming increasingly easy to pick holes in.
Digiconomist is doing its best with the data available, but it appears to be largely estimate based, with plenty of wide assumptions taking place. For example, the site estimates that miners spend approximately 60% of all revenues on operational costs, with 1 kWh consumed for every 5c spent. These figures don’t seem realistic at all, which raises doubts over Digiconomist’s other data. Again, it’s a case of Digiconomist doing its best to present the data it has, but it isn’t anything that anyone can take as gospel.
Putting it all in perspective
At times, the data related to Bitcoin energy consumption can be misleading, but that isn’t the only thing that is perpetuating the myth that Bitcoin is a power drain. Many are levelling criticism at Bitcoin’s energy consumption because its energy use seems obvious in the public eye. However, when you put things into perspective, when compared to other, traditional currencies, Bitcoin may be a little more “green” than many people realise. People either forget – or are simply unaware – of what stands behind every single standard card transaction that places. Every time you use a debit or credit card – which is backed by fiat currencies – transactions must pass through thousands upon thousands of large data centres that conduct data processing and extensive fraud detection. Running 24/7, this is just one cost heavy factor that stands behind fiat currency use. Yet, because these mass energy-consuming elements aren’t routinely discussed, they are often forgotten. When you weigh up Bitcoin and its digital presence against that of “standard” currencies, things don’t exactly look as awful as some would have you believe.
Bitcoin is greener than you think!
Stories seem to be published everywhere labelling Bitcoin as “power hungry”, but this really is a false label. Bitcoin actually doesn’t need a huge amount of power to function, especially when it’s weight up against the energy consumption of fiat currencies. Plus, the energy consumption problems that Bitcoin does face should be phased out as Bitcoin’s software continues to evolve and improve. Other cryptocurrencies are also working to battle this issue, which makes the argument against the Bitcoin energy consumption myth that much stronger.
It might be a stretch to label Bitcoin as a “Green Coin”, but it isn’t a stretch to say that this cryptocurrency has the potential to be the most efficient way to conduct transactions on a global scale. Debunked and dismissed, next time you hear someone say that Bitcoin is “power hungry”, you can now see that such statement doesn’t actually hold much water.