We humans have an interesting trait that makes us believe and cling to any argument, no matter how stupid, when it strengthens our belief in something we don’t like. It’s a strange trait of human nature that we see in everything that divides people, whether it’s religion, politics, video games or sports. If a group of people don’t like a person (an event or an object) they will begin to analyze everything they don’t like about it and remain ignorant of any positive aspects of it.
It is something we see daily. For example, if there is a public figure who does not like a group of people, this group will try to analyze every little characteristic, feature or action of that person, considering it intolerable. But if those same traits are present in someone who is liked by that group, those flaws become “quirks” and will be supported or even considered tolerable.
If our favourite player scores a goal, it is because he is skilful and incredible, but if a player from the opposing team scores a goal. How many fans claim he cheated, played dirty or got lucky? We have all seen this custom and have fallen into it at some time. We want to support the things we support and we can get into the habit of ignoring any flaws associated with them by choosing to look from a point of view that supports our bias.
Experts call this trait denialism or confirmation bias, which is what makes us human beings reject facts and figures that oppose our opinions and beliefs. Confirmation bias is the trait that leads people to claim that the earth is flat despite being presented with mountains of evidence to the contrary.
A simple diagram on confirmation bias. Image via boycewire.com
Too often these biases lead to criticism that can be downright damaging and insultingly untrue, as we have seen in many Bitcoin stories. There has been a lot of FUD and false narratives tarnishing Bitcoin’s reputation over the years. Some of these criticisms and concerns are legitimate, while others are downright ridiculous. We are clear that not everyone has a good view of Bitcoin, what’s more, we know that many people have concerns that seem reasonable to us and there are even some criticisms with which we agree.
However, from time to time, frankly ridiculous and easily refuted arguments arise. But despite denying them, many people continue to believe in them, since the habit of forming opinions based on news headlines without bothering to investigate the subject is almost normalized.
The first narrative about Bitcoin that we saw a long time ago was that governments should ban Bitcoin because people use it for illegal purposes and to finance terrorism. We still hear this argument today, although it is quite obvious that suitcases full of cash have been used for dirty deeds much more than cryptocurrencies have been, knowing this no one mentions the possibility of banning cash. Not to mention that while Bitcoin transactions are traceable, cash is not, so you wouldn’t be a very bright criminal using Bitcoin to commit illicit acts.
It is time to end this narrative. Image via Forbes
To prove this point, a recent report from Chainalysis shows that of all cryptocurrency transactions, criminal activity in 2019 only accounted for 2.1%, and in 2020 that number dropped to 0.34%, so… How are these people still paying? the criminal capos and their traffickers? With old-fashioned cash, just the way it’s always been. Can we drop this ridiculous argument against cryptocurrencies already?
The other narrative we would like to discuss is that Bitcoin mining is bad for the environment. We’ll run through some stats, figures, and arguments that should help clear up any confusion and arm you with an argument for when you need to defend Bitcoin’s honour after hearing someone say it’s destroying the planet, knowing that the people saying this clearly haven’t bothered. to do your own research.
Table of Contents
Lack of understanding or intentionally fueled hate?
In early 2021, we were in a bull market, portfolios were growing, people were celebrating Bitcoin’s meteoric rise, we were all getting rich, times were good. Microstrategy, Tesla, and Square had all added Bitcoin to their balance sheets, and we thought the price of Bitcoin was going through the roof.
What we did not expect was that a war against Bitcoin mining was about to break out. Suspiciously, many mainstream financial publications and mainstream media simultaneously began spitting out stories about how Bitcoin was suddenly the worst thing that had ever happened to the planet.
A super scientific and funny diagram that explains how Bitcoin mining works. Image via twitter/bitcoinmemehub
This is pure opinion and speculation on our part, as we will never know for sure, but it seems that every time Bitcoin starts to experience a good rally, a coordinated attack seems to come out of nowhere to stifle the growth of the asset. We think there may be some legitimate reasons why the “ powers that be ” would want to keep Bitcoin’s potential tied up and keep the price low. We will discuss this last point later.
We don’t think this narrative was initially driven by a lack of understanding, although the enormous sentiment that added fuel to the fire afterwards certainly was. So, as we always do when we hear an extremist opinion make it to the news headlines, we started looking into these claims about whether Bitcoin mining is actually bad for the environment.
In just ten minutes we were able to determine that this claim was unsubstantiated, erroneous and exaggerated. Anyone who had spent a few minutes doing some research on their own would have come to the same conclusion, so we believe that the initial claim was not driven by misunderstanding, but rather intentionally driven, as it was easy to find contradicting evidence.
Bitcoin mining does use electrical energy, but it is not as harmful as the media makes it out to be. Unfortunately, many of the reports and articles have been negligent, apparently on purpose, leaving out many other factors and ignoring the full picture of the matter, choosing to highlight Bitcoin mining while excluding any other industry that uses any other form of energy.
The reports also chose to ignore the fact that there are dozens of different types of energy being used today, a fact that plays a big part in all of this, as each type of energy has a drastically different effect on the environment. environment. The fact that we were able to dispel this FUD in minutes led us to believe that it was an intentionally spread agenda, but… why?
Why keep the price of Bitcoin under control?
In this section, we offer more speculation because we think there may be reasons why those in positions of power do not want to see the price of Bitcoin shoot up too quickly. This could be why these damaging narratives seem to be published every time the price of Bitcoin rises significantly, leading us to wonder why these articles and reports seem coordinated, why they are published simultaneously, and why the SEC keeps rejecting them. Bitcoin ETFs, keeping the price of Bitcoin low.
Bitcoin is gaining market share – Bitcoin is pulling capital out of traditional markets at a rapid rate and we have seen its market capitalization reach $1 trillion in record time. After Bitcoin was declared as the best performing asset of the decade and one of the best-performing assets of all time, many investors started to get exposed to it.
We are seeing an exodus of capital leaving the stock markets, the bond markets, the precious metals markets, and many other markets, as investors are materializing their investments to gain exposure to Bitcoin. Many rich and powerful people have large investments in the stock, bond, or metal markets. The last thing these people want is to see money start to flow out of their markets or even never return to them as money is finding a new home in the Bitcoin market.
Bitcoin reached a trillion-dollar market capitalization in just 12 years. Image via visualcapitalist.com
Sudden adoption of Bitcoin can destabilize the economy: The more hype surrounding Bitcoin, the more FOMO we see among investors, causing money to drain from traditional markets, which in turn is not good for anyone who has invested in Bitcoin. them, nor for the economy itself. The strength of a country’s economy is related to and depends on the health and stability of the stock and bond markets. Too extreme and sudden an outflow of money from these markets could destabilize the economy, so the last thing governments, businesses and investors want is for Bitcoin to become popular too quickly.
One of the biggest hype and popularity boosts for Bitcoin occurs when its price soars to all-time highs, making headlines. That is when investors enter the Bitcoin market like there is no tomorrow and while doing so they dump other assets. There is a correlation between the price of Bitcoin and its popularity, so when the price is kept low we don’t see those high levels of enthusiasm and adoption rate.
The investment industry is tribal: We know a person who invests in real estate and who heard about Bitcoin in its early days, just like us. Like many people, he dismissed Bitcoin as a fad (just like we did for a while). To this day, he is still a hater, and we are still in the market. Every time Bitcoin goes down, we get a message saying something along the lines of, “I bet they regret buying Bitcoin.” Yeah, damn those dips, we sure regret buying Bitcoin.
Bitcoin growth continues despite declines. Image via learn.bybit
No matter how many times we clearly show him that, despite the dips, our BTC portfolio has appreciated more than his real estate could ever do, he still sticks to his belief that he made the right decision. Many people seem to take the fact that they did not have the foresight to enter an investment in time or made a wrong decision personally.
There are a lot of egos at stake in the investment industry and no one wants to admit that they missed out on a great opportunity or made a bad decision. Many investors are upset that they have not invested in Bitcoin or are angry when it outperforms their investments, wishing it ill and wanting to see it burn simply because they have bet on other markets.
It sounds silly, but such tribalism can be toxic, and it certainly can be in the investment industry. We see it in people like Warren Buffett when he repeatedly says that Bitcoin is “rat poison”. Instead of simply saying that Bitcoin is not for him, or that he does not want to try to understand it, or that he wishes Bitcoin investors the best and good luck, but he, along with many others, directly attacks Bitcoin and insults it. In our opinion, this is a rather childish position.
Buffett has nothing but hateful things to say about Bitcoin. Image via Investinblockchain
Institutions want to buy cheaply: It takes a long time for institutions and companies to move large amounts of money. The process can be cumbersome, especially if they need to convince shareholders and customers, and the legal and regulatory framework behind changing asset allocation from company treasuries to an asset like Bitcoin can be a big hurdle.
Many institutions are waiting for regulatory clarity around digital assets, so it is very likely that some companies will have to wait to enter the sector since they are lining up all their chips and waiting for the green light to invest in Bitcoin. As a result, there may be a large coordinated effort to keep BTC prices low while institutions wait before they can jump into buying at depressed levels.
These are some of the reasons why we believe there could be a coordinated effort to keep the price of Bitcoin low, which is how narratives like “Bitcoin is bad for the environment” get started. Now let’s analyze some arguments in its defence through some statistics and figures.
Power consumption not understood
The energy consumption and environmental impact of Bitcoin are continually commented on and criticized, but rarely understood. Many arguments come from comparing the energy use of Bitcoin mining to the electricity use of an entire nation, comparing churras to merinos. Critics seem unable to understand that “energy use” is very different from “electricity use.”
Energy consumption by source. Image via Nasdaq.com
If we look at the graph above, not all “energy” is used equally. Oil, coal and gas are the main forms of energy used by most industries and society in general. We see that renewable energy makes up a small fraction of global energy use and most Bitcoin mining uses renewable energy. More than a billion people do not have access to electricity, but still, have access to energy through fuels. Much of the world does not rely on electricity for survival as they use alternative forms of energy, much like Bitcoin miners. Many miners use the gas as a source of energy, which turns out to be more ecological. Mining uses energy that would otherwise have been wasted due to oil and gas production.
The energy consumption of Bitcoin mining is negligible. Image via Forbes
Of the 160,000 TWh of energy generated per year around the world, 50,000 TWh are lost due to inefficiency, while the electricity grids only generate 25,000 TWh. Bitcoin mining consumes between 120TWh and 190 TWh, just 0.1% of global energy production while using between 0.2% and 0.4% of wasted energy. To put this in perspective, video game users use more energy than Bitcoin mining, but we don’t see anyone saying that video games should be banned for this reason.
The Bitcoin Mining Council clarifying some data. Image via cointelegraph
Bitcoin mining has been unfairly singled out over any other industry for its contribution to increasing global carbon emissions. This has happened as a direct result of uninformed and biased news articles. Reports have been published highlighting comparisons between metrics with no apparent connection, such as energy vs. electricity use, ignoring statistics from other industries and activities that use higher amounts of energy, cherry-picking numbers and not looking at the big picture considering industries that use fossil fuels versus renewable forms of energy.
This narrative was intentionally pushed to spread FUD, including being published by media outlets that are not properly informed or conduct a thorough investigation.
Another factor that contributes to so many people toeing the “Bitcoin mining ban” line comes from the fact that many people do not fully understand the positive impact that Bitcoin has in the world today and that we believe it will continue to have in the world. future. Many people still consider Bitcoin to be “ fancy money ” or a Ponzi scheme. It’s easy to support a ban on something when you think it has no use or purpose.
Many people still do not understand blockchain technology and have already come to certain conclusions, not realizing the potential of this technology, so they feel that it is not worth consuming energy at all. As a reader of Coin Bureau, we assume that you are aware of the potential of blockchain technology to save humanity and make the world a better place.
Bitcoin’s potential to improve the lives of billions of people around the world can be seen in its potential energy use, and as Bitcoin education increases alongside Bitcoin mining becoming greener, we are I am sure that this witch hunt that has been imposed on Bitcoin mining will end.
Bitcoin has the potential to save the world. Image via inbitcoinwetrust.net
Bitcoin mining predominantly uses sustainable energy sourced from renewable resources
We also cannot underestimate the fact that Bitcoin mining does not use the same fossil fuels and energy from burning coal, which are supposedly responsible for climate change. According to Deutsche Bank Research, the China National Energy Agency, and Morgan Stanley Research, 78% of Bitcoin’s energy use comes from renewable energy.
Image via dailyadvent.com
Going back to the ridiculous argument that Bitcoin mining uses more energy than entire countries, we can say that it has been proven wrong and digging deeper, we can see that Bitcoin mining uses a sustainable energy mix compared to any nation.
Bitcoin mining uses a sustainable energy mix. Image via cointelegraph
We think that another critical factor of Bitcoin that we should mention and understand is why Bitcoin mining uses mainly renewable energy, compared to any other nation or industry. We wish we could say that this happens because Bitcoin miners are more environmentally conscious and visionary, but we have to be realistic.
Bitcoin miners do all of this to make a profit, just like everyone else. One of the main reasons they are using greener options is that they know they are under attack, so they are doing their best to keep the public happy so they can continue to operate and not risk being shut down. The other reason is the simple fact that Bitcoin miners are chasing the cheapest energy source available, which they increasingly obtain through renewable sources of energy.
Bitcoin is getting greener
As the world becomes increasingly concerned with protecting the health of the planet, Bitcoin mining is also seeing a push to be as green as possible. Several private initiatives in the cryptocurrency ecosystem, such as the Bitcoin Mining Council and the Crypto Climate Accord, have recently sprung up to address growing sustainability concerns and to ensure efficiency and transparency around cryptocurrency energy consumption. . As a result of this, we have seen how El Salvador has turned to use volcanoes to power the energy needed for Bitcoin mining, while hydroelectric plants in New York are also providing greener mining solutions.
As mentioned above, Bitcoin miners have also started settling in oil fields to take advantage of waste gas emissions from oil production, so many institutions are feeling pressure from ESG regulations around compliant investments. environmental care regulations, further promoting the adoption of green Bitcoin mining.
Bitcoin mining is taking advantage of the energy wasted by combustion gases in the extraction of oil and natural gas. Image via businessinsider
The technology is also advancing, so companies like Intel and NVIDIA are offering specialized Bitcoin mining chips that are energy-efficient, which will make it possible for many people to use them on their computers and consume little energy. As the technology becomes more energy efficient, Bitcoin mining will continue to become much more sustainable. Cryptocurrency mining is likely to one day become completely emission-free, or even emission-negative.
Both Intel and NVIDIA have plans to release energy-efficient chips for Bitcoin mining. Image via gadgets.ndtv
Conclusions
We hope that this article has been helpful in your research to try to determine if Bitcoin mining is as harmful to the environment as the media makes it out to be, we may even have provided you with a link that you can share the next time you find yourself in a discussion with someone who hates Bitcoin and could benefit from reading an alternative point of view.
Fortunately, aside from the spread of this misinformation, we have also seen organizations such as the Bitcoin Mining Council and the Crypto Climate Accord come into being, not only to ensure that Bitcoin mining remains efficient but to help dispel myths. and accurately reporting the energy consumption of Bitcoin mining, so we are witness to the attempt to stop these false accusations that have been spread in the mainstream media.
There have also been notable figures like FTX CEO Sam Bankman-Fried and Michael Saylor who have defended Bitcoin mining against these false accusations, including on social media.
Not all heroes wear capes: Michael Saylor defends Bitcoin against uninformed and hostile critics. Image via bitcoinmarketjournal
One of the most infuriating aspects of this entire narrative is that many of the people who are saying that Bitcoin mining is harmful to the planet are ignorantly hypocritical, as many of them are the same ones who rely on the traditional financial system on a daily basis, which they use much more energy than Bitcoin mining while driving fuel-guzzling SUVs, running clothes dryers and air conditioners 24 hours a day, while their son is in the room playing video games and they have all the lights in the house on.
We’re not saying that people shouldn’t use hair dryers or play video games, but it would be good if they realized that they are part of the problem and that they should educate themselves before criticizing what they don’t understand. As the old saying goes: we see the speck in someone else’s eye but not the beam in our own.
Thank you for taking the time to read this article. These days it can be difficult to separate truth from fiction, so we have great respect for anyone who takes the time to research sources of information and is willing to consider multiple points of view. We feel fortunate to have been able to do our bit to help dispel a false narrative. Our investigations have shown us that there are organizations, individuals, reports and articles that are collectively working together to make energy use in Bitcoin mining more transparent, information that we hope will find its way to the media to educate the masses
Disclaimer: These are the opinions of the author and should not be considered investment advice. Readers should do their own research.
