Should cryptocurrencies like Bitcoin be banned worldwide over environmental concerns about the amount of energy it takes to mine them?
TL;DR: Absolutely NOT. This question is oblivious to the fact other systems we consume in this world are far more damaging to the planet and are known energy hogs.
First, how much energy does the average household in the States consume every month? (I use the States as they are among the worst offenders for just about any consumption.) [^1]
U.S. Energy Information Administration
In 2019, the average annual electricity consumption for a U.S. residential utility customer was 10,649 kilowatt-hours (kWh), an average of about 877 kWh per month. Louisiana had the highest annual electricity consumption at 14,787 kWh per residential customer, and Hawaii had the lowest at 6,296 kWh per residential customer.
An ASIC machine comes equipped with a 2600W [^2] power supply. A kilowatt-hour is calculated as follows:
The energy E in kilowatt-hours (kWh) is equal to the power (P) in watts (W), times the time period t in hours (hr) divided by 1000:
With this simple formula, we can find that a single miner consumes about 1872 kWh a month. And no matter how many miners are in operation, a single Bitcoin is created every 10 minutes.
Obviously, an individual house in America consumes more energy than the average bitcoin miner.
How about the current financial system? How much and what kind of energy do they consume?
Bank of America owns and operates at least 23 datacenters.[^3] A single rack of servers can consume up to 20 kWatts per hour. The average datacenter contains at least 10,000 server racks. Each rack holds several servers with varying energy needs. So, per month, BoA’s energy consumption is 200 mWatts (200,000,000 Watts)! Not counting what the other banks, insurance companies, hedge fund operators, and Wall Street consume… BoA, alone, consumes at least 4.6 TerraWatts (4,600,000,000) per month! You can bet very few of them are using renewable, non-carbon emitting energy sources. Why doesn’t anyone ask the banks to use clean energy? Or, why the financial sector is trying so hard to sell a bad reputation on Cryptocurrencies?
Let’s compare that with your standard Bitcoin mining operation. The largest Bitcoin mining company in China[^4][^5] houses at least 25,000 machines. Let’s assume each machine is sporting the overpowered power-supply of 2600 Watts. This is less likely as the cost of the machine and utility costs along with the cooling cost and infrastructure to support it are rather high. But, still, let’s say they did that.
As you can see a single Bitcoin mining operator consumes far less energy (regardless of source) than a typical datacenter operated by a big bank in the States each month.
If you are truly concerned about the environment and how we get our energy, then we should take a closer look at actual mining done on this planet. Places where we have literally turned mountains into deep earth pits. All in an effort to find coal, oil sands, cobalt, gold, silver, and any other commodity that is heavily traded on the market. None of these are carbon-neutral and definitely not carbon-negative.
Love owning gold? Assuming you have possession of actual gold, how do you think it arrived in your hands? You could never argue that trading gold is less carbon neutral[^6] than owning Bitcoin (or any other cryptocurrency).
Furthermore, many mines around planet employ slaves and children in their operations. These unfortunate souls work in terrible, and often fatal, conditions. The mine operators see their workers as expendable like you might see your paper coffee cup. So, by owning gold, diamonds, silver, etc… you are saying that you support the proliferation of not only our planet, but our fellow Humans as well.
In conclusion, I can find no good reason to ban Bitcoin nor any of the AltCoins just to satisfy the lust of power the current banking system has on our governments and peoples. To believe otherwise is to buy the Fear, Uncertainty, & Doubt (also known as “FUD”) that distracts everyone from the facts the current financial system feels threatened by the existence and growing popularity of cryptocurrencies.
Knowledge is not only freedom and currency, but power to live your life. Use it wisely.
[^1]: Frequently Asked Questions (FAQs) - U.S. Energy Information Administration (EIA)
[^2]: Amazon.com: 2600W Power Supply for ASIC Miner
[^3]: Bank of America prioritized internal cloud. Now it’s evaluating third-party providers
[^4]: Full Page Reload
[^5]: Photos: Inside one of the world’s largest bitcoin mines
[^6]: Brilliant Earth
[^7]: HBR.org - How Much Energy Does Bitcoin Actually Consume?