Bitcoin mining is not environmentally friendly?Coinbase tells these 5 misconceptions and 18 truths

Recognizing things for what they are is not an easy task.

Bitcoin mining is not environmentally friendly?Coinbase tells these 5 misconceptions and 18 truths

As Bitcoin becomes increasingly mainstream, some investors and the public have questions about how it works, and one of the most talked about issues is the potential environmental impact of Bitcoin mining.

Bitcoin mining is the process used by the Bitcoin blockchain to generate new BTC and validate transactions. First, let’s recognize the basic fact that bitcoin mining is indeed an energy-intensive process, there is no doubt about that. As the price of bitcoin has risen and more and more miners have become involved in bitcoin mining, energy consumption has risen.

However, recognizing things for what they are is not an easy task. Is the energy use of bitcoin mining really damaging to the environment? The answer to this question is actually a bit complicated and worth exploring in depth so that we can understand the true situation.

Misconception #1: Bitcoin is the main cause of climate change
From a scientific point of view, this is simply not true. While Bitcoin energy consumption is not insignificant, it is not seen as a major driver of climate change. To understand why, you may need to understand a little bit about how mining works.

Mining is the process Bitcoin and some other cryptocurrencies use to generate new tokens and validate new transactions. A vast network of decentralized computers distributed around the world can be used to protect the blockchain (a virtual ledger that records cryptocurrency transactions), and in order to give some reward to those who contribute to the blockchain network, miners can be rewarded with new tokens. It’s a virtuous circle: miners maintain and protect the blockchain, and the blockchain awards tokens that provide incentives for miners to maintain the blockchain’s security.

In April of this year, many overseas media outlets published warnings that the carbon emissions from Chinese bitcoin mining could drive global warming out of control. But most of the reports on which these articles were based were seriously flawed; they felt that because most of China’s power grid is powered by coal, they rashly assumed that Chinese miners also rely on coal energy for mining, which is actually incorrect.

The truth.

  1. Miners have been actively searching for the cheapest energy sources because it is driven by mining interests. These cheapest sources of energy are usually excess electricity energy (which would be wasted if not used) and/or sustainable energy, and also trigger lower electricity prices.

2, Half of the world’s bitcoin mining activity is in Sichuan, China, due to the fact that the region has 95% renewable energy generation and hydroelectricity is often in surplus.

3, 75% of miners already use renewables as part of their mining energy mix.

4, Most importantly, according to the Cambridge Bitcoin Electricity Consumption Index, the researchers behind the index concluded that.

“Currently, Bitcoin’s environmental footprint is – at best – negligible.”

Myth #2: Bitcoin and the Environment Can’t Coexist
As crypto and green energy technologies continue to mature, more and more bitcoin miners are bound to look for places where electricity is cheapest to mine, and while we can’t completely eliminate the use of fossil fuel energy, the best way for miners to make the most profit is to look for places where there is a surplus of electricity. In fact, Bitcoin itself has the unique advantage of making renewable energy available to everyone in a cheaper and more convenient way.

Truth.

  1. Renewable energy is often in surplus supply at the moment, and if this renewable energy generation energy cannot be used, it will be wasted.

6, Take natural gas for example, as many of you know, many natural gas producers produce excess natural gas and then “burn” it, which is very harmful to the environment and no one benefits from it, while bitcoin can convert this excess energy into value without a net increase in carbon emissions.

  1. By using green energy for bitcoin mining, utilities can turn their excess energy supply into a profit. In fact, one publicly traded power company is now exploring direct participation in bitcoin mining to capture value from excess supply, which can be used to build sustainable energy operations.
  2. By creating a viable market for renewable energy, Bitcoin could also incentivize more companies to build more green energy infrastructure, which could further reduce clean energy prices, a virtuous cycle that could actually make a significant contribution to fighting climate change.

Myth #3: Bitcoin is less efficient than the traditional financial system
Frankly, many of the shocking news stories come from a lack of basic understanding of how Bitcoin works. You’ve probably heard some incredibly surprising claims, such as.

“Bitcoin uses as much energy to process transactions per day as the 1 billion credit card transactions that occur every day, and will eventually use 14 times the world’s total electricity.”

In reality, these numbers tend to confuse the energy cost of bitcoin mining with the cost of transactions.

Truth.

  1. Energy consumption comes primarily from mining blocks on the blockchain, not from transactions. (The “mining” process accomplishes multiple goals, including generating new BTC and validating new transactions. However, as the name implies, the primary function of mining is to generate new bitcoins.)
  2. Mining each block consumes energy, but Babbitt transactions don’t consume much energy. In fact, there are already many tools that explore aggregating more transactions on each bitcoin block, such as batch processing, isolated witnesses, and lightning networks, which means that the energy cost per transaction will be further reduced in the future.

Myth #4: Bitcoin Consumes “Too Much” Energy
There’s no denying that bitcoin is a relatively new thing, so you’ll be shocked to hear that it consumes as much energy as Norway. But you need to think about it another way: Norway’s GDP as a whole is about $400 billion, while the total economic value of bitcoin (i.e. the total market cap) is up to $1 trillion, so a direct comparison is not a good idea, but the important thing to remember is that both the bitcoin economy and GDP consume energy, but whether or not energy is used wisely depends a lot on the the value generated. If evaluated in this way, Bitcoin is actually a much more efficient use of resources than many industries.

Truth.

11, In the United States alone, the annual electricity energy wasted just by not using household devices could provide 1.5 years of electrical energy for bitcoin mining.

  1. One study found that bitcoin energy consumption is actually far less than other financial systems, using half the energy of the gold mining industry and less than a fifth of the energy consumed by bank branches and ATMs.

Myth #5: The Cryptocurrency Industry Can’t Solve Environmental Problems
As the largest cryptocurrency by market capitalization, Bitcoin is the first thing that comes to mind when talking about cryptocurrencies, ignoring instead the second largest cryptocurrency by market capitalization, Ether. The current upgrade that Ether is undergoing, Ether 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.

In terms of mining, key stakeholders in the cryptocurrency space are actively encouraging the use of sustainable energy in a variety of ways – the Crypto Industry Climate Accord was launched in early 2021 with the goal of reaching 100% sustainable energy production by 2025.

TRUTH.

13, Elon Musk recently tweeted that Tesla is suspending Bitcoin payments due to environmental impact concerns with BTC. Cryptocurrency is a great idea, and we believe it has a bright future, but that can’t come at a huge environmental cost. Tesla will not sell BTC, and we will continue to use it for transactions once it transitions to sustainable energy for its mining methods. We are also considering using cryptocurrencies with lower energy consumption (<1% of Bitcoin’s energy consumption). on May 23, Elon Musk tweeted another meeting with mining companies, who pledged to report on current and planned renewable power usage and encouraged the industry to follow through with implementation. microStrategy CEO Michael Saylor retweeted the tweet, saying that he brokered a meeting between Musk and a group of North American mining companies, who agreed to form a Bitcoin Mining Council to improve transparency in energy use and accelerate global sustainability initiatives.

Representatives from Argo Blockchain, Blockcap, Core Scientific, Galaxy Digital, Hive Blockchain, Hut 8 Mining, Marathon Digital Holdings, and Riot Blockchain, among others The meeting was attended by representatives of mining companies. The companies agreed to form an organization to advance the standardization of power reporting, pursue corporate environmental, social and governance performance, and work together to nurture and promote market growth.

14、Ethernet is currently upgrading its blockchain, the second largest cryptocurrency by market capitalization, from a proof-of-work-based “mining” system to a more energy-efficient and environmentally friendly proof-of-stake system, which has actually been adopted by many cryptocurrencies.

Square recently announced a $10 million bitcoin clean energy investment program to promote the use of clean energy in bitcoin mining.

16, Just last week, several large bitcoin mining companies released green initiatives, including Greenidge Generation Holdings, which said its New York bitcoin mining operation will be carbon neutral on June 1, and Argo Blockchain, which announced its newly launched mining operation in Canada will use hydroelectric power.

Argo Blockchain recently said it has signed a preliminary agreement with Canadian mining company DMG Blockchain Solutions to launch “the first purely clean energy-powered bitcoin mining pool,” which has joined the Cryptocurrency Climate Agreement (CCA). CCA). The Cryptocurrency Climate Accord is an initiative co-sponsored by private companies in Bitcoin mining that pledges to help the mining industry achieve 100% sustainable energy production by 2025, and zero net carbon emissions by 2040.

18, Coinbase Ventures recently invested in Crusoe Energy, a Denver-based energy company that is preparing to convert some surplus natural gas into electricity and transmit it to data centers to mine bitcoin to generate additional revenue.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/bitcoin-mining-is-not-environmentally-friendlycoinbase-tells-these-5-misconceptions-and-18-truths/
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