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Misunderstanding and truth about Bitcoin mining and environmental pollution

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As the price of bitcoin has risen, more and more miners have taken part in bitcoin mining, and energy consumption has also increased.

原文标题：《比特币挖矿不环保？Coinbase 道出这 5 大误解和 18 个真相》

原文来源： Coinbase

Original translation: Moni, ODaily Planet

As Bitcoin has become increasingly mainstream, some investors and the public have questioned how it works, with the potential environmental impact of bitcoin mining being one of the most focused issues.

Bitcoin mining is used by the Bitcoin blockchain to create new ones. BTC And the process of verifying the transaction. First, let's acknowledge a basic fact: Bitcoin mining is, of course, an energy-intensive process. As the price of bitcoin has risen, more and more miners have taken part in bitcoin mining, and energy consumption has also increased.

However, recognizing the nature of things is not an easy thing to do. Is the energy use of Bitcoin mining really damaging the environment? The answer to this question is a little complicated, and it's worth exploring to understand what's really going on.

Myth 1: Bitcoin is a major cause of climate change

From a scientific point of view, this is simply not true. Bitcoin, despite its considerable energy use, cannot be seen as a major contributor to climate change. To understand why, it might take a little understanding of how mining works.

Mining is the currency of the COINS and other encryption used to generate new tokens, and verify that the New Deal, the process of large decentralized distribution all over the world computer network can be used to protect block chain (record encrypt money trading virtual ledger), in order to give those who contribute protection block chain network must return, miners can get new tokens, rewards. It's a virtuous circle: miners maintain and protect the blockchain, and the blockchain grants tokens that provide incentives for miners to keep the blockchain safe.

In April, many overseas media outlets published warnings that carbon emissions from Bitcoin mining in China could drive global warming out of control. But most of the reports on which these articles are based are deeply flawed. They assume that coal supplies the bulk of China's electricity grid and therefore that Chinese miners are also dependent on coal for energy, which is incorrect.

The truth:

1. Miners have been actively seeking the cheapest source of energy because it is driven by mining interests. These cheapest sources of energy are usually surplus electricity (which would be wasted if not used) and/or sustainable sources, which also lead to lower electricity prices.

2. Half of the world's bitcoin mining is in Sichuan, China, which is home to 95 percent of its renewable power generation and is often oversupplied with hydroelectric power.

3. 75% of miners already include renewable energy as part of their mining energy mix.

4. Most importantly, according to the researchers behind the Cambridge Bitcoin Electricity Consumption Index:

"Right now, Bitcoin's environmental footprint is at best -- minuscule."

Myth 2: Bitcoin and environmental protection do not co-exist

As crypto and green energy technologies mature, more and more bitcoin miners are bound to seek out the cheapest electricity. While we can't completely eliminate fossil fuel energy, the best way for miners to maximize their profits is to seek out places with excess power. In fact, Bitcoin itself has the unique advantage of making renewable energy cheaper and easier for everyone to access.

The truth:

5. At present, renewable energy sources are often in oversupply and will be wasted if they cannot be used to generate electricity.

6, with natural gas as an example, believes that many people all know, many natural gas producers in the production of excess gas, most direct "combustion", this kind of practice is very bad for the environment, and no one will benefit, and the currency is the excess energy can be transformed to value, at the same time also won't increase net carbon emissions.

7. By using green energy for bitcoin mining, utilities can monetise their excess energy supply. In fact, one publicly traded power company is now exploring direct participation in bitcoin mining to extract value from excess supply that could be used to build sustainable energy operations.

8. By creating a viable renewable energy market, Bitcoin could also incentivize more businesses to build more green energy infrastructure, thus further lowering the price of clean energy, a virtuous cycle that could actually make a significant contribution to combating climate change.

Myth 3: Bitcoin is less efficient than the traditional financial system

Frankly, many shocking news stories stem from a lack of basic understanding of how Bitcoin works. You've probably heard some incredibly surprising statements like:

"The amount of energy used to process transactions in Bitcoin every day is equivalent to 1 billion credit card transactions per day, and will eventually use up to 14 times the world's total electricity."

In fact, these numbers tend to conflate the energy costs of bitcoin mining with the transaction costs.

The truth:

9. Energy consumption mainly comes from mining blocks on the blockchain, rather than transactions. The "mining" process achieves several goals, including generating new BTCs and validating new transactions. But, as the name suggests, the main function of mining is to generate new Bitcoins.)

10. It takes energy to mine each block, but Babbitt trading doesn't take much energy. In fact, there are already many tools exploring aggregating more transactions on each bitcoin block, such as batch processing, segregated witness, lightning networks, etc., which means that the energy cost per transaction will be further reduced in the future.

Myth 4: Bitcoin consumes "too much" energy

Admittedly, Bitcoin is a relatively new thing, so it must come as a shock to hear that it consumes as much energy as Norway. But you need to put this in perspective: Norway's entire national GDP is about $400 billion, and Bitcoin's total economic value (i.e., total market capitalization) is $1 trillion, so direct comparisons aren't appropriate, but it's important to remember: Both the Bitcoin economy and GDP need to consume energy, but the rational use of energy largely depends on the value brought by the use of resources. If measured this way, Bitcoin is actually a much more efficient use of resources than many industries.

The truth:

11. In the United States alone, the wasted electricity consumption from not using household equipment could provide 1.5 years of electricity for Bitcoin mining each year.

12. Studies have found that Bitcoin also uses far less energy than other financial systems, using half the energy of the gold-mining industry, and less than a fifth of the energy used by bank branches and ATMs.

Myth 5: The cryptocurrency industry can't solve environmental problems

As the largest cryptocurrency by market capitalization, when it comes to cryptocurrencies, the first thing that comes to mind is Bitcoin, while ignoring the second largest cryptocurrency by market capitalization -- Ethereum. Currently undergoing an upgrade, Ethereum 2.0 aims to enable a wider range of economic activities (from lending and saving to minting; NFT) is faster, cheaper and greener.

Not only that, but cryptocurrencies like Cardano are designed from the bottom up, also with an eye to sustainability.

On the mining front, key stakeholders in the cryptocurrency space are actively encouraging the use of sustainable energy in a variety of ways -- the Cryptocurrency Climate Agreement was launched in early 2021 with the goal of achieving 100% sustainable energy production by 2025.

The truth:

13. Elon Musk recently tweeted that Tesla was suspending Bitcoin payments because of concerns about the environmental impact of BTC. Cryptocurrency is a great idea and we believe it has a bright future, but it can't come at a huge environmental cost. Tesla will not sell BTC, and we will continue to use it for trade once its mining methods transition to sustainable energy. We are also looking at using cryptocurrencies that use less energy. 1% of bitcoin's energy consumption). On May 23, Elon Musk tweeted that he had met with mining companies, who promised to report on their current and planned use of renewable power and encourage the industry to follow through. Michael Saylor, CEO of MicroStrategy, retweets that he brokered a meeting between Musk and a group of North American miners, who agreed to form a Bitcoin Mining Council to improve transparency on energy use. Accelerate the Global Sustainability Initiative.

Argo Blockchain, Blockcap, Core Scientific, Galaxy Digital, Hive Blockchain, Hut 8 Mining, Marathon Digital Holdings, and Riot Representatives of mining companies including Blockchain attended the meeting. The companies agreed to form an organization to promote standardization of electricity reporting, pursue corporate environmental, social and governance performance, and jointly foster and promote market growth.

Ethereum is currently undergoing an upgrade. As the second largest cryptocurrency by market capitalization, the Ethereum blockchain will move from a "mining" system based on proof of work to a more energy efficient and environmentally friendly proof-of-stake system. Proof of stake consensus has actually been adopted by many cryptocurrencies.

15. Square recently announced a bitcoin clean energy investment of up to $10 million to promote the use of clean energy in bitcoin mining.

16. Just last week, several major bitcoin miners launched green initiatives, Greenidge Generation Holdings said its New York Bitcoin mining operation will be carbon neutral by June 1, and Argo Blockchain announced that its new Canadian mining operation will be hydroelectric.

Argo Blockchain recently said it has signed a preliminary agreement with Canadian mining company DMG Blockchain Solutions to launch "the first pure clean energy-powered bitcoin mining pool," which has joined the Cryptocurrency Climate Agreement (CCA). The Cryptocurrency Climate Accord is an initiative co-sponsored by private Bitcoin mining companies that promises to help the mining industry achieve 100 percent sustainable energy production by 2025 and zero net carbon emissions by 2040.

18. Coinbase Ventures recently invested in Crusoe Energy, a Denver-based Energy company that is trying to convert some of its surplus natural gas into electricity and transfer it to data centers to mine bitcoin for additional revenue.