Bitcoin

Is Bitcoin really as polluting as they say?

Bitcoin is the number 1 cryptocurrency in the world, it is the first of all and the one that has grown the most over the years. Many argue that, currently, the environmental impact of Bitcoin is too important, since its mining of it is an energy-inefficient process. This, added to the fact that until a while ago the largest mining market was in China, a country that uses highly polluting energy sources, such as that produced by coal-based stations.

Recently, Michael Saylor, former CEO of MicroStrategy, told the press that this is all misinformation and that Proof-of-Work cryptocurrency mining is the cleanest use of energy today, calling claims that Proof-of-Work mining is polluting disinformation and propaganda. There are many interests within the crypto world, in effect, this type of doubt is generated regarding the veracity of certain statements and data, comments that intensified before the merger of Ethereum, which eliminated the proof of work of its mining model.

Is Bitcoin polluting?

To know if what Saylor says is true, we must analyze it from two points of view: where the energy to mine is obtained from and how it is used. Today, after China was no longer an important market for cryptocurrency mining, due to the government banning it, the entire market was transported to other parts of the world, where, unlike the Asian country, which uses coal to extract energy is the cheapest of all, other much cleaner sources are used, such as wind, hydro and nuclear energy.

Currently, 59.5% of the energy for mining cryptocurrencies comes from renewable sources, according to Saylor himself. In addition, with the existence of stablecoins and the Ripple (XRP) wallet, and Tether (USDT), and Binance USD (BUSD) wallets, Exchange-type transactions consume fewer resources when carried out between two cryptocurrencies and not from FIAT currency, which also improves the execution times.

The proof-of-work uses high energy consumption components

Now the elephant in the room is still the proof-of-work, is it energy efficient like Saylor says? Those who argue against mining claim that cryptocurrencies, and especially Bitcoin, use a process that consumes too much energy since very high computing power is needed to run the necessary proofs of work to produce new Bitcoins. The program poses a mathematical operation to your PC and it must solve it to verify a block, which generates a reward: a new token or a fragment of it.

The mining farms are huge and use the component that is capable of performing the most operations per minute on the computer: the graphics card, and to create a mining farm, many graphics cards are needed, which, by themselves, do not consume too much energy, but together yes Those who affirm that Bitcoin pollutes, explain that the market consumes in 1 second the energy that a country like Argentina consumes in a year.

Is this true? According to Saylor, it’s misinformation. The Bitcoin network, which is currently worth around $420 billion, uses around $4-5 billion in electrical energy, according to its own words, which is less than what big companies like Google, Netflix, or Facebook use, and around 1-2 times less energy than airlines, retail, hospitality, agriculture, and other major industries use.

In addition, according to the executive, thanks to the rapid evolution of semiconductors, the energy used in mining cryptocurrencies is much less today than when Bitcoin was launched, in the already distant 2008.

Saad Ullah

An engineer with a passion for innovative technology, blockchain has been a natural attraction. More than a decade of experience in handling HR, HSE and IT management systems for FMCG companies. Currently pursuing Masters in Business Administration.

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Saad Ullah

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