Viewpoint 丨 Can the value of Bitcoin cover the environmental costs of mining?

Bitcoin is still a very controversial topic at present. This world's most important cryptocurrency has been one of the biggest disruptors in the financial sector for the past 10 years. However, there are still many concerns about bitcoin, especially the bitcoin mining may have an impact on the environment.

Viewpoint | Can the value of Bitcoin cover the environmental costs brought by mining

(Image source: flickr)

The large mining pools that support the Bitcoin network consume a lot of energy when running. A recent report published by LongHash shows that according to Digiconomist, Bitcoin's carbon footprint is roughly the same as New Zealand's. This is a reality that we need to face, and at the same time, it is a red flag for many potential cryptocurrency adopters.

Castle Island Ventures partner Nic Carter expressed his views on the environmental costs of bitcoin mining in the latest podcast show "What Bitcoin Did". He emphasized that other resources like gold, like Bitcoin, also consume a lot of energy during the mining process.

He says:

It takes a lot of money to mine gold. Perhaps some people will say that in order to dig gold from the ground, a lot of machinery and equipment are wasted. This is a waste, it is nothing more than an inert metal. The miner would dig the gold out of the ground, put it in the vault, and send someone to guard it. People value gold. Although mining, transporting, and preserving gold are 'wasteful', not digging gold is really a waste.

Carter mentioned that the situation with Bitcoin can also be demonstrated in a similar way. He said that bitcoin is valuable, and it is a real waste to not bitcoin. He says:

Bitcoin is valuable, and its total market value is around $ 200 billion. It is also a sign that the world considers Bitcoin to be important and valuable. Bitcoin's value has been steadily increasing over the past 10 years. In fact, although mining Bitcoin requires some energy or cost, you can think of it as a kind of 'waste', but the world recognizes and values ​​the existence of Bitcoin, so not mining Bitcoin is waste.

China's large custody mining pools play a very important role in Bitcoin mining. In fact, Bitcoin's five largest mining pools operate in China.

Viewpoint | Can the value of Bitcoin cover the environmental costs brought by mining

Source: CoinDance

When it comes to the energy used in these pools, Carter said:

Some bitcoin mining machines use coal-fired thermal energy to generate electricity, but in fact most of the mining machines are hydroelectric. Part of the reason is that China's Sichuan has built a large number of hydroelectric power stations, and many of the power stations' power will be wasted if not mined.

Carter went on to say that Bitcoin is valuable and it is important, which is why he can "tolerate" mining costs. For those who value the value of Bitcoin, the cost of mining is reasonable. However, from a purely environmental perspective, the energy consumption caused by Bitcoin mining will continue to soar.

According to Digiconomist's Bitcoin Energy Index, Bitcoin's power consumption has been increasing since 2017. Currently, bitcoin uses approximately 77.78 TW / h of electricity annually, which is close to the total electricity consumption of the entire country of Chile.

Viewpoint | Can the value of Bitcoin cover the environmental costs brought by mining

Source: Digiconomist

In addition, due to the technological advancement of Bitcoin and the increasing difficulty of mining, a large number of scrap miners will be generated. As the miners are eliminated every 1.5 years, and the eliminated miners have no other use, this is also an urgent problem to be solved.

Viewpoint | Can the value of Bitcoin cover the environmental costs brought by mining

Source: Digiconomis

Although mining Bitcoin will bring environmental problems, we still need to consider whether cryptocurrencies like Bitcoin have greater value, so as to cover the environmental costs they generate.