Katrina Kelly-Pitou, Research Associate in Electrical and Computer Engineering at the University of Pittsburgh, believes that by talking about the consumption of energy alone, many people fail to understand one of the most basic benefits of renewable energy systems.
“Electricity production can increase while still maintaining a minimal impact on the environment,” she writes in The Conversation. “Rather than focusing on how much energy Bitcoin uses, the discussion should centre around who indeed is producing it – and where their power comes from.”
Iceland vs China
Bitcoin mining uses a huge amount of power. It has been estimated that Bitcoin used 30 terrawatt hours alone in 2017 alone – as much electricity as it takes to power the entire nation of Ireland in one year. But Kelly-Pitou points out this is not exorbitant. Banking consumes an estimated 100 terrawatts of power annually. If Bitcoin technology were to mature by more than 100 times its current market size, it would still equal only 2% of all energy consumption.
Moreover, Kelly-Pitou says not all types of energy generation are equal in their impact on the environment, nor does the world uniformly rely on the same types of generation across states and markets. Iceland, which is becoming a popular place for Bitcoin mining, relies on nearly 100% renewable energy for its production.
“Bitcoin mining in China, with a largely fossil-based electricity source, may indeed be problematic. China is already one of the world’s major contributors of carbon emissions. However, Bitcoin mining in Oregon? Not the same thing,” she writes.
Kelly-Pitou argues that the discussion about energy consumption is unfair without discussing the energy intensity of new technologies overall, specifically in datacentres. “So far, it seems that only miners are currently shifting toward cleaner parts of the world. So perhaps people should quit criticising Bitcoin for its energy intensity and start criticising states and nations for still providing new industries with dirty power supplies instead,” she concludes.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.