This article comes fromCoinbase Official Blog, Odaily translator | Moni
, Odaily translator | Moni
As bitcoin has become more mainstream, some investors and the public have raised questions about how it works, with one of the most raised concerns being the potential environmental impact of bitcoin mining.
However, it is not easy to recognize the nature of things. Will the energy use of Bitcoin mining really damage the environment? The answer to this question is actually a bit complicated, and it is worth exploring in depth so that we can understand the real situation.
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Myth 1: Bitcoin is the main cause of climate change
From a scientific point of view, this is simply not true. Although Bitcoin consumes a lot of energy, it cannot be regarded as a major driver of climate change. To understand why, it may be necessary to understand a little bit about how mining works.
Mining is the process used by Bitcoin and some other cryptocurrencies to generate new coins and verify new transactions, and a vast, decentralized network of computers spread across the globe is used to secure the blockchain (the virtual ledger that records cryptocurrency transactions) , in order to reward those who contribute to the protection of the blockchain network, miners can be rewarded with new tokens. It’s a virtuous cycle: miners maintain and secure the blockchain, and the blockchain awards tokens, which provide incentives for miners to maintain the security of the blockchain.
In April of this year, many overseas media issued warnings that China’s carbon emissions from Bitcoin mining could make global warming runaway. But most of the reports on which these articles are based are seriously flawed. They think that most of China's power grid is powered by coal, so it is rash to think that Chinese miners also rely on coal energy for mining, which is actually incorrect.
the truth:
1. Miners have been actively looking for the cheapest energy, because this is driven by mining interests. These cheapest sources of energy are usually excess electricity (which would be wasted if not used) and/or sustainable energy sources, which also drive down electricity prices.
2. Half of the world's bitcoin mining activities are in Sichuan, China, because the local area has 95% renewable energy generation, and hydropower is often in excess.
3. 75% of miners already use renewable energy as part of their mining energy mix.
“Currently, Bitcoin’s environmental footprint is at best — negligible.”
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Misunderstanding 2: Bitcoin and environmental protection cannot coexist
With the continuous maturity of encryption technology and green energy technology, more and more bitcoin miners are bound to look for places with the cheapest electricity prices to mine. Although we cannot completely eliminate the use of fossil fuel energy, for miners, if they want to obtain The best way to maximize profits is to find places with excess electricity. In fact, Bitcoin itself has a unique advantage: making renewable energy cheaper and more accessible for everyone.
the truth:
5. At present, renewable energy is often in a state of oversupply. If the energy generated by these renewable energy cannot be used, it will be wasted.
6. Taking natural gas as an example, I believe many people know that after many natural gas producers produce excess natural gas, most of them directly "burn" it. This practice is very harmful to the environment, and no one can benefit from it. Bitcoin However, it is possible to convert this excess energy into value without adding net carbon emissions.
8. By creating a viable renewable energy market, Bitcoin can also incentivize more companies to build more green energy infrastructure, thereby further reducing the price of clean energy. This virtuous circle can actually make a huge contribution to fighting climate change .
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Misconception 3: Bitcoin is less efficient than the traditional financial system
Quite frankly, a lot of the shocking news comes from a lack of basic understanding of how Bitcoin works. You may have heard some amazing statements, such as:
“Bitcoin’s daily transaction energy consumption is equivalent to 1 billion credit card transactions per day, which will eventually consume 14 times the total electricity in the world.”
In fact, these figures tend to conflate the energy cost of Bitcoin mining with transaction costs.
the truth:
10. Mining each block consumes energy, but Babbitt transactions do not consume much energy. In fact, there are already many tools exploring the aggregation of more transactions on each Bitcoin block, such as batch processing, segregated witness, lightning network, etc., which means that the energy cost of each transaction will be further reduced in the future.
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Myth #4: Bitcoin consumes 'too much' energy
Admittedly, Bitcoin is a relatively new thing, so it must come as a shock to hear that it consumes as much energy as Norway. But you need to think about it this way: the GDP of Norway as a whole is about $400 billion, and Bitcoin's total economic value (i.e. total market cap) is $1 trillion, so it's not really a direct comparison, but something to keep in mind The important point is: Both the Bitcoin economy and GDP consume energy, but whether the use of energy is reasonable depends largely on the value brought by resource utilization. When evaluated in this way, Bitcoin is actually a much more efficient use of resources than many industries.
the truth:
12. Studies have found that the energy consumption of Bitcoin is actually far less than other financial systems. Its energy consumption is only half of the energy consumption of the gold mining industry, and it is less than one-fifth of the energy consumption of bank branches and ATMs. one.
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Myth 5: The cryptocurrency industry cannot solve environmental problems
As the largest cryptocurrency by market value, when it comes to cryptocurrencies, people first think of Bitcoin, but ignore the second largest cryptocurrency by market value-Ethereum. Currently, Ethereum's ongoing upgrade, Ethereum 2.0, aims to make a wider range of economic activities (from lending and saving to minting NFTs) faster, cheaper, and greener.
Not only that, but cryptocurrencies like Cardano are designed from the bottom up with the same focus on sustainability.
When it comes to mining, key stakeholders in the cryptocurrency space are actively encouraging the use of sustainable energy in various ways - the Crypto Industry Climate Agreement was launched in early 2021, aiming to achieve 100% sustainable energy production by 2025. Target.
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13. Elon Musk (Elon Musk) recently tweeted that Tesla has suspended Bitcoin payments due to concerns about BTC's environmental impact. Cryptocurrency is a great idea, and we believe it has a bright future, but not at a huge environmental cost. Tesla will not be selling BTC and we will continue to use it for transactions once it transitions from mining to sustainable energy. We are also considering cryptocurrencies with lower energy consumption (<1% of Bitcoin's energy consumption). On May 23, Elon Musk tweeted that he had met with mining companies. Mining companies promised to report current and planned renewable electricity usage and encouraged the industry to follow up. MicroStrategy CEO Michael Saylor retweeted the tweet, saying that Musk had met with a group of mining companies in North America through him, and the mining companies agreed to set up a Bitcoin Mining Council to improve the transparency of energy use. , to accelerate global sustainability initiatives.
Representatives of mining companies such as Argo Blockchain, Blockchaincap, Core Scientific, Galaxy Digital, Hive Blockchain, Hut 8 Mining, Marathon Digital Holdings and Riot Blockchain participated in the meeting. Enterprises agreed to establish an organization to promote the standardization of electricity reporting, pursue corporate environmental, social and governance performance, and jointly cultivate and promote market growth.
14. Ethereum is currently undergoing an upgrade. As the second largest cryptocurrency by market value, the Ethereum blockchain will be transferred from a proof-of-work-based "mining" system to a more energy-efficient and environmentally friendly proof-of-stake system. The proof-of-stake consensus is currently in fact Already adopted by many cryptocurrencies.
15. Square recently announced a Bitcoin Clean Energy Investment Plan of up to $10 million to promote the use of clean energy in Bitcoin mining.
16. Just last week, several large bitcoin mining companies released green initiatives, among which Greenidge Generation Holdings stated that its New York bitcoin mining operation will achieve carbon neutrality on June 1, and Argo Blockchain also announced its new launch in Canada. of mining operations will use hydroelectric power.
17. Argo Blockchain recently said it had signed a preliminary agreement with Canadian mining firm DMG Blockchain Solutions to launch “the first purely clean energy-powered bitcoin mining pool,” which has joined the Cryptocurrency Climate Agreement (CCA) . The Crypto Climate Protocol, an initiative co-sponsored by private bitcoin mining companies, has pledged to help the mining industry achieve 100% sustainable energy production by 2025 and zero net carbon emissions by 2040.
