The Bitcoin Energy Monster
The Bitcoin Energy Monster
By Vitto K | vol.10 - Citadel21.com
Lately the media has been creating a narrative heavily attacking the energy consumption of Bitcoin.
Bitcoin is portrayed as a massive beast that is consuming all of the world's energy, and the harbinger of global warming by being the biggest polluter in the world. They are using large numbers and comparing the energy use to that of entire nations.
But the reality is that this narrative is very skewed, selective, and the information being presented does not necessarily reflect the entire picture.
As proponents and firm believers in Bitcoin and what it stands for, it is our responsibility to be well informed and ready to provide a response to all those that fell for this narrative. This is an amazing opportunity for us to turn this attack around in our favor by using nothing but facts and numbers.
In order to properly understand the amount of energy being consumed by Bitcoin, we need to put it in perspective.
Let’s look at some other numbers and compare them to Bitcoin.
I would like to preface this with noting that a lot of these figures will not be exact; we will be averaging from the generally accessible information. The point of this article is not to have exact figures but to understand the overall concept. Also, there are many great scientists and analysts that have already published articles that dive in-depth and explain the actual figures behind the energy consumption of Bitcoin, and prove that contrary to popular belief, Bitcoin is an extremely energy efficient enterprise.
Bitcoin vs EV
For our analysis, we will compare Bitcoin's energy use to something that is portrayed as sustainable, revolutionary, good for the economy, and an overall salvation for humanity; the electric vehicle, or EV for short.
Still a fairly new and emerging technology, one that was brought forth and made popular by the 'saint' of the world, Elon Musk. As of this moment we have over 7.5 million EVs on the streets all over the globe. An EV consumes about 250 Wh per mile, and travels 11k miles per year. Combining these rough numbers provides us with an average annual consumption of 20 TWh for all EVs currently on the planet.
This is one fifth of the average energy consumption that Bitcoin is being accused of "stealing" from the world.
This is not considering the amount of energy that was consumed in manufacturing, distributing, selling, and servicing the EVs.
Now if we take into account the average cost of an EV which is currently at $50k, we are looking at a $360 billion market. Comparing this data to the current market of $1 trillion Bitcoin, and an average annual energy consumption of 100 TWh, we can already see that the ratios for "market value to energy consumption" are fairly close between Bitcoin and EVs. These are the EVs that are plugged into the same electrical grid from which Bitcoin miners are pulling their energy from. The plug does not discriminate, it's not like it sends 'clean' energy into the EV and 'dirty' energy into the mining rig.
Now one could say that this is an unfair comparison since the EVs are useful and provide people with critical transportation needs. How else are we to get to work, buy groceries, or visit our loved ones? The fact is that there are many different types of transportation vehicles, and they all serve the same purpose.
Bitcoin is just as useful and necessary as an EV; it allows us to store and transfer value (money).
Yes, certainly there are other ways of achieving the same results, but just like with non-EV vehicles (fossile fuel powered), the other existing solutions for money and store of value are inefficient, problematic, and outdated.
The Bigger Picture
This is a very simple and straightforward example that can be easily understood by anyone, but how about we look at energy consumption on a global scale to understand the even bigger picture?
Currently, we consume about 150,000 TWh annually on a global scale. Over 50% of this consumption comes from industrialization (manufacturing), and 25% is consumed by transportation. All of this energy consumption is used to produce, store, and maintain something of value (ex: commodities, products, services, etc). Looking at it this way, we can understand that this energy consumption is responsible for the global monetary value. Bitcoin's total monetary value is revolving around the $1 trillion mark at the moment (a little under 1% of the world's 'broad money').
Using these numbers we can calculate that it is costing us an average of 0.06% of the global energy to store and transact one percent of the world's circulating money supply.
When comparing this way, Bitcoin's energy doesn't seem to be inefficient and "bad", but rather revolutionary and quite justifiable. Many can still argue that such a large percentage of the global energy being utilized for one solution is not efficient and does not bode well for our future.
They have to understand what Bitcoin is, what it stands for, and what problems are being solved with it.
We are at war with the traditional, rigged, and obsolete financial system. This is a digital war where, instead of bullets and bombs, we are fighting with ones and zeros. Electricity is the raw energy with which this war machine is being fueled, and the fact that the raw energy needed for Bitcoin to operate is justifiably greater than that of some countries, is a really good indicator that we are winning the war. Any opponent to Bitcoin would have to redirect massive amounts of their current energy usage in order to fight it. This would be expensive, difficult, and most importantly, a public endeavour. Banks and nations no longer can fight Bitcoin from the shadows and try to downplay the seriousness and severity of this battle.
Not once in history was a war "efficient" in it's resource consumption.
Nations had food shortages, factories changed their production lines, people were forcefully drafted, and money was scarce. But after a war, the spoils went to the winners while the losers had to pick up the tab. Bitcoiners have to understand that for the greater good, sacrifices have to be made. It will not be easy, we won't always have the public's approval, and will definitely not always be illuminated under a positive spotlight. But battles are not started for nothing and they most definitely are not without reason and purpose.
We are on the right side, fighting for sovereignty of the future of finance.
Let's win this war so that the banks come out as the losers and will be held accountable for the damages and chaos that they wrought on this world for generations.
