Updated: Jun 21, 2023
https://www.theguardian.com/technology/2023/apr/26/bitcoin-mining-climate-crisis-environmental-impact
An Environmentalist’s Guide to Bitcoin – quietly going green
The Guardian recently published an article claiming that ‘Bitcoin is terrible for the environment’. Regrettably, the article did not research more widely than the usual sources for this tired narrative, and failed to uncover a whole wealth of information that tells a very different, and quite unexpected story. The original article contained numerous factual mistakes – some of which we will address here – couched in emotive language. We are of the view that sensationalism not only does a disservice to readers in the UK and around the world but also masks perhaps an even more sensational story – that the open global Bitcoin network is actively working to benefit the environment in a wide variety of ways. In keeping with Bitcoin’s ‘don’t trust, verify’ ethos, we would like to bring to your attention some of these stories, and to address several of the inaccuracies that were sadly included in your esteemed paper.
Before we delve into detail, we need to take a step back and acknowledge that Bitcoin miners are themselves zero-emission computers. A Bitcoin mining company is simply a buyer of electricity, no better and no worse than a person who wants to charge their electric vehicle or run their tumble drier. Any emissions come from electricity generation, which is what we as a society should be aiming to make sustainable – and, ironically, Bitcoin can help with this too.
Secondly, any serious discussion of Bitcoin needs to consider why it is valuable, and why millions of people worldwide have chosen it as a means to transact, to store their wealth, and to protect themselves from currency debasement. This can be difficult to understand if we live in a country with inflation at (only!) ten per cent. For citizens facing hyperinflation, wealth destruction at an unprecedented scale, or tyrannical regimes where every financial transaction is monitored or censored, or who cannot open bank accounts or access the financial system, having access to a permissionless global monetary network like Bitcoin that excludes no one, and which cannot be stopped or censored by any power on earth, makes perfect sense. Bitcoin’s consumption of energy is an essential part of this story – energy cannot be forged and it is this that ties the digital Bitcoin to the physical world, meaning that no one can censor transactions, debase the monetary supply, or tamper with the network’s rules.
Turning to the article, we note that it conspicuously failed to mention an important detail about the Greenpeace campaign. In 2022, Chris Larsen, Executive Chair and co-founder of Ripple Labs is widely acknowledged to have donated $5 million to Greenpeace USA (GPUSA) and worked with Change the Code to push a campaign that benefits his former company. Ripple, currently being sued by the SEC in relation to an alleged issue of unauthorised securities, is the issuer of a token called XRP, which briefly made Larsen one of the world’s richest men before its value plummeted from its all-time high price in 2018. Ripple is trying to convince banks that XRP is an eco-friendly solution for payment systems used by the existing banking sector. In short, they want to replace an old centralised system, with their own even more centralised system. Bitcoin jeopardises this goal, and it has been suggested that Larsen’s actions in attacking Bitcoin are to be viewed through the lens of his own financial interest in XRP’s success.
It is worth noting that Benjamin Von Wong, the artist mentioned in The Guardian’s article, was unaware of just how many facts were twisted by GPUSA’s campaign when he was hired. This information can be easily verified on the artist’s Twitter page with a quick search. In the artist’s own words:
“I made the Skull believing that Bitcoin Mining was a simple black-and-white issue. I’ve spent my entire career trying to reduce real-world physical waste, and PoW felt intuitively wasteful. Of course, I was wrong. Few things in the world are black and white. Dumb me.”
Besides the significant conflict of interest, what other issues did the article overlook?
According to the article, Bitcoin’s “Proof-of-Work” (PoW) is blamed for contributing to greenhouse gas emissions. The key problem with the figures presented is that they assume all miners are plugged into heavily fossil fuel based grid systems, and the location of the grids in question is derived from the IP address of the miners, which can be extremely inaccurate. Bitcoin miners share the vision that we need to improve grid infrastructure & increase renewable capacity. The economics of Bitcoin mining force miners to look for the cheapest forms of energy on the planet, which tend to areas in which there are excess renewables or stranded energy, To this end, a high percentage of mining is not even on grid at all (approximately 30% according to a report by Climate Tech Investor, Daniel Batten), a key differential that every outlet fails to mention when deriving Bitcoin’s “total” energy use. The mining that is on grid, tends to heavily renewable grid systems like ERCOT in Texas, which because of the need for flexible demand on their renewable and non synchronous grid, attracts some of the largest Bitcoin mining facilities in the world. Bitcoin mining’s role as a provider of demand response is a little-known story, but one which would provide a fascinating subject for Guardian readers to learn about as an alternative to a regurgitated ‘Bitcoin mining bad’ article.
The Guardian failed to address potentially the most fascinating intersection of environmentalism and Bitcoin, which has been a highly discussed topic for the past few years: methane emissions. Surprisingly, the article did not mention environmentalists’ public enemy number one, methane, a GHG 80x more potent than CO2. Bitcoiners however are constantly discussing the environmental impact of methane, and its huge potential as a means of reducing and mitigating CO2 emissions. This is a significant omission, given that the UK government has repeatedly acknowledged methane emissions’ detrimental effects.
‘Cutting methane emissions is one of the fastest and most cost effective tools available to limit global temperature rise to 1.5°C.’ *1*
According to Daniel Batten, himself a former Greenpeace activist, Deutsche Bank has made a statement regarding the trajectory of Bitcoin’s network towards mitigating more CO2e emissions than it produces *2*. It’s worth noting that CO2e stands for “carbon dioxide equivalent” and is a measure of greenhouse gas emissions that combines the effect of all greenhouse gases, including methane, on the environment. Batten argues that, counterintuitively, we actually need more Bitcoin mining as long as it is powered by renewable energy sources, stranded wasted energy, and predominantly methane that without mining, would otherwise be flared. More mining, in the right locations, would lead to more CO2e emission reduction. The current trajectory of methane mitigation mining development suggests that it may be possible for the Bitcoin network to be carbon neutral by the end of this decade.
Is it necessary to act immediately? The Guardian acknowledges at the end of the article that renewable energy could be a solution. Still, the rest of the article erroneously suggests that Bitcoin’s network is already causing significant environmental damage – this despite the fact that the Deutsche Bank report cited by Daniel Batten reveals that renewable energy sources already power 51% of the network.
In terms of gross electricity consumption, according to live data from Cambridge University, Bitcoin miners consume only 0.2% of the world’s electricity *3*. However, energy consumption comparisons, to that of countries, is the common misleading and emotional approach to mining. The facts show that Bitcoin’s electricity consumption is negligible, for what is a global monetary network empowering millions of people.
As mentioned in the article, let’s focus on comparing PoS (Proof of Stake) and PoW (Proof of Work). Rolf Skar has suggested that PoS could help Bitcoin achieve net zero and reduce its emissions, which currently stand at just 0.15%. It is worth noting that individuals already tried implementing PoS by creating BitcoinPoS in May 2020. Bitcoin PoS is a fork of the Bitcoin code, but it has not gained popularity because it ultimately hampers decentralisation. The loss of mining, would be a loss of the energy mechanism that makes Bitcoin so secure and the effective energy consumer we are seeing gain plaudits across ERCOT and the flare gas industry. Bitcoiners have pointed out to Greenpeace USA and Skar that Bitcoin’s PoW mechanism will never be changed, but this falls on deaf ears.
The recent video by WEF showcasing Crusoe’s use case highlights the potential benefits of a location-agnostic and unfussy energy consumer for decarbonisation – showing computing installations that are co-located with otherwise wasted or vented sources of methane *4*. The video refers to ‘data centres’ that are in fact Bitcoin mining computers, and seems reluctant to mention that the solution being used is Bitcoin mining, which may seem counterintuitive to the majority watching and ultimately contradict the majority of mainstream narratives. This reluctance may be due to misconceptions and misunderstandings about the environmental impact of Bitcoin mining, as exemplified by Wong’s previous misunderstanding. While it is important to acknowledge the concerns and criticisms surrounding Bitcoin, it is also crucial to recognise the potential of this technology in promoting a sustainable energy future. Rather than dismissing it as disinformation, we should approach this topic with an open mind and explore how Bitcoin mining can contribute to the transition towards a greener economy.
Conclusion
The report portrays the global Bitcoin network, which currently uses only 0.2% of global electricity, as a significant environmental threat. We hope the information provided above is a stepping stone in the path towards normalising the conversation around mining being a key grid ancillary and decarbonising process – and that The Guardian’s curiosity may be piqued to investigate the other side of the mining story, uncovering poorly-publicised sustainability success stories. There needs to be acknowledgement that Bitcoin will never move away from PoW, and for good reason. The article overlooks the groundbreaking work being done by scientists, academics, and industry leaders within the Bitcoin community on methane mining, which has put Bitcoin on a path to carbon neutrality.
It’s time for a shift in perspective and to support the remarkable efforts of the Bitcoin community in building out a sustainable energy system. The network can contribute to decarbonising the planet and provides financial inclusion to the unbanked population worldwide, estimated to be around one billion. By promoting Bitcoin’s development, the UK can become a world leader in clean energy, use mining for methane mitigation, and achieve its climate goals. At Bitcoin Policy UK, we firmly believe this deserves a closer look.
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