To those that say this is a waste and has no good purpose, you should know that most energy used by miners is renewables because renewables (especially during off-peak hours) are the cheapest source of energy.
Bitcoin’s value to society is the ability to easily transfer money from point A to B and having a clear fiscal policy it has kept to for 15 years, 365 days a year, 24/7 without a single hour of downtime, a bank holiday, or getting hacked. There’s a reason big money like hedge funds and private banking are investing in it: it’s actually useful and has massive potential. The market cap of Bitcoin is 850 BILLION USD, that’s bigger than the GDP of Sweden or Israel or Vietnam. People use it to move over a trillion dollars of value a year. You can debate how much of that movement is trading & speculation vs use as a currency, but it’s a trillion nonetheless. I personally pay for things regularly with Bitcoin, you’d be surprised how many places you can spend it when you start looking. And it’s available to anybody with a cellphone and halfway reliable internet access, including the billions of people who are “unbanked” and lack access to stable banking infrastructure.
Transactions on Bitcoin lightning occur in under a second and cost pennies in fees. That’s to send it across the room or across the globe. Remittance services and bank wires use just as much energy and cost 10x-1000x as much. And they waste not just energy but human capital as well, we no longer need humans manually sending bank wires like it’s 1910. You just don’t see headlines about the energy impact of bank wires or western union because it’s not novel, we just accept it as a cost of our financial system.
The energy used by miners is needed to secure the Bitcoin network. Historically, we have built currencies of incredibly inequitably distributed resources: precious metals, stable governments, etc. Bitcoin was the first one to build an economy based on pure energy. This stuff literally falls from the sky. While it is not perfectly equitably distributed, it is the most equitably distributed resource on earth that can be used for this purpose.
This is the best summary I could come up with:
While its analysis is preliminary, the Energy Information Agency (EIA) estimates that large-scale cryptocurrency operations are now consuming over 2 percent of the US’s electricity.
The EIA report notes that, in the wake of a crackdown on cryptocurrency in China, a lot of that movement has involved relocation to the US, where keeping electricity prices low has generally been a policy priority.
One independent estimate made by the Cambridge Centre for Alternative Finance had the US as the home of just over 3 percent of the global bitcoin mining at the start of 2020.
Tracking the history of five of these plants showed that generation had fallen steadily from 2015 to 2020, reaching a low where they collectively produced just half a Terawatt-hour.
To better understand the implications of this major new drain on the US electric grid, the EIA will be performing monthly analyses of bitcoin operations during the first half of 2024.
But based on these initial numbers, it’s clear that the relocation of so many mining operations to the US will significantly hinder efforts to bring the US’s electric grid to carbon neutrality.
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