Industry figures told a conference in London that best practices mean that more than half of bitcoin mining by major producers is powered by renewables and that the sector will finance a revolution away from waste to clean or weak energy production.
“You have a concept called grid congestion which is where you might have a power plant that generates four gigawatts of energy, but the grid [capacity] “It might only support the transmission of half a gigawatt — so three and a half gigawatts are wasted,” said Fred Thiel, CEO of Marathon Digital Holdings.
Roman Nozareth, co-founder of Canada Computational Unlimited Corp, said bitcoin has been unfairly labeled an environmental villain.
“If you want to point fingers, it won’t solve anything,” he said. “We have to look at what the real energy consumption is… Comparing the energy consumption of bitcoin with the energy consumption in Sweden is not fair because bitcoin is a global industry.
“More than 58 percent of the energy we use is renewable.”
To counteract overpressure on national grids or wastage, Thiel said the world will move toward a model in which electricity is generated at the point of consumption.
“You will move from a centralized utility to the small network, and you will have highly distributed Bitcoin mining with emerging technologies that can basically be left for a year,” he said.
This will finance the construction of infrastructure. Bitcoin mining will go and finance all of this renewable energy.”
Framing bitcoin as environmentally progressive rather than harmful is likely to raise eyebrows in the scientific community, which has criticized bitcoin mining.
In research released last year, the Cambridge Center for Alternative Finance estimated that bitcoin uses about 110 TWh per year – 0.55 percent of global electricity production, which is equivalent to Sweden’s annual energy use.
Moreover, bitcoin can be mined almost anywhere, with critics pointing out that its universality disproportionately affects poor communities. This phenomenon has been dubbed the “mining mega-migration”: Bitcoin miners are looking for the cheapest sites to mine energy.
From a regulatory perspective, decentralized and decentralized digital currency is also seen by many financiers as a problem.
“There is a long tail of individual investors who have invested in crypto assets,” BoE Deputy Governor John Cunliffe said at a press conference. The Wall Street Journal It happened this week.
“Do they all understand what they have invested in? I don’t think so. For this long tail of retail investors, I’m not sure they understand it. They don’t really see this as a financial investment.”
It also raised concerns about the spread of currency fluctuations in the broader financial system.
“There is no intrinsic value around crypto assets, they move with sentiment. They are basically being quoted as a risky asset, and prices have been constantly dropping pretty much,” Cunliffe said.
The view is that one of the Bitcoin chiefs at the AIM Summit in London might dismiss it as being overly pessimistic.
Jaime Leverton, CEO of Hut 8 Mining, said pessimism and fear accompany any major technological shift. She cited emails and cell phones as two fairly recent examples.
“Bitcoin is the big disrupter, similar to what postal service email did.
“When email was first launched, the US Postal Service said email would boil the oceans, as all that energy is used to process these transactions. They tried to impose a stamp tax.”
Whether her view is colored by tribalism or not, one thing is irrefutable – bitcoin mining as a concept behind largely societal prada.
What is bitcoin mining?
In order to generate bitcoins, mining is required using a Proof of Work protocol where miners actively race against time to verify transactions on the blockchain, the virtual record of who owns bitcoins — the bank’s equivalent of cryptocurrencies.
This process is free for everyone and uses computing power, as miners realize that the more power they have in their digital arsenal, the higher their chances of success.
In practice, this means a huge number of computers and temporary devices, needed to operate 24 hours a day, seven days a week, and to work at a concert while expending huge amounts of energy.
It is not only the makeup of the energy mix of Bitcoin that Mr. Nozareth said stands up well in other industries, but it is also the efficient way in which that energy is used.
“It’s very good for Grid because it doesn’t cause fights,” he said.
“We can stop mining immediately when a country, county or state needs energy.”
Mr. Nozareth’s resentment is emblematic of an industry that feels unfair trade, and his grievance manifests itself in widespread criticism against those he considers malign actors.
“For me, what is darker than the picture [of bitcoin] People push the false agenda to say that we are a bad industry, when we are not at all, and we are working and showing that we are heading in the right direction.
“The real waste of energy is the issue – it’s not an issue.”
Thiel said nuclear power would soon make the matter a thing of the past.
“I think we’ll see [nuclear] I come back because of what happened here in Europe with this energy crisis, and we will see small modular nuclear reactors … very safe, very self-sufficient,” he said.
He also predicted the spread of bitcoin mining in Africa and the Middle East after China disavowed the practice.
“One of the benefits… is that a lot of mining has moved to North America and North America is now close to 50 percent [of the world’s total].
Today we will continue to see mining operations in the developed world.
“Less in Europe due to energy constraints, but certainly Latin America, Africa and the Middle East will certainly be a hotbed.”
Like it or hate it, one thing is clear: Bitcoin isn’t going anywhere.
Updated: May 18, 2022, 9:35 a.m.