Michael Saylor, the head of MicroStrategy, now a longtime Bitcoin supporter and investor, has published a lengthy blog post in an attempt to erase the urban legends hovering around Bitcoin mining.
Indeed, the post contains a number of points aimed at explaining how mining really works in terms of energy consumption. The article is aimed at journalists, investors and regulators who are interested in the topic in order to avoid falling into misconceptions and misinformation.
Given the sheer volume of misinformation & propaganda circulating lately, I thought it important to share the truth regarding #Bitcoin Mining and the Environment.https://t.co/CRkayFwDsj
— Michael Saylor
(@saylor) September 14, 2022
Oftentimes, one of the downsides pointed out by Bitcoin detractors is the energy consumption caused by mining and Proof of Work (PoW), i.e., the consensus mechanism on which the entire BTC blockchain functions.
Bitcoin mining produces fewer carbon emissions than Google, Facebook or Netflix
In fact, as Saylor explains in his post, mining does not consume that much, especially in relation to the benefits.
The post reads:
“Approximately $4-5 billion in electricity is used to power & secure a network that is worth $420 billion as of today, and settles $12 billion per day ($4 trillion per year). The value of the output is 100x the cost of the energy input.”
Indeed, even calculating how much companies like Google, Netflix or Facebook consume, Saylor comes to the conclusion that BTC is less wasteful.
It is also worth mentioning that 99.2% of carbon emissions are the fault of industries and not mining, which makes Bitcoin safe compared to other cryptocurrencies that do not have Proof of Work but are centralized.
Furthermore, Saylor states:
“Bitcoin runs on stranded, excess energy, generated at the edge of the grid, in places where there is no other demand, at times when no one else needs the electricity.”
The reality is that in large cities, electricity is charged about 10-20 cents per kwH, while miners choose areas where the cost is much lower (about 5-10 times less) so it is a cheap margin of energy and one that would not be put to other uses.
Mining is also done with clean, renewable energy
According to this research published by Saylor, 59.5% of the energy for Bitcoin mining would actually come from sustainable sources, which is why energy efficiency has improved by 46% year-over-year, which dispels the argument that Bitcoin pollutes.
In fact, even according to Ark Investment CEO Cathie Wood, mining will increasingly shift to solar and wind power and because of this, Bitcoin will one day be worth $500,000.
Moreover, in April, Ark Investment and Square, Jack Dorsey‘s blockchain company, had produced a research paper entitled “Bitcoin is the key to a clean and abundant energy future,” which argued that crypto mining pollutes less than gold mining or the entire banking system.
Ethereum and the Merge towards Proof of Stake
Saylor may well be called a Bitcoin maximalist, i.e. a firm believer in BTC as the only true crypto worth investing in and betting on technologically. That is why his report is based on BTC and not on other cryptocurrencies.
In any case, it is worth noting that generally speaking, Proof of Work certainly pollutes more than other consensus methods, and in this sense the Ethereum Merge that marked today’s transition from PoW to Proof of Stake will be helpful in polluting less.
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