Nice job steelmanning the climate argument for bitcoin!
I also looked into this recently, and my take is a bit more nuanced. Yes bitcoin miners accelerate renewables, but is that really good for the planet in itself? I argue that it isn't if most of the renewable energy that bitcoin miners helped finance goes back into powering bitcoin miners instead of replacing existing carbon-intensive electricity generation. See https://climatechain.substack.com/p/bitcoin-miners-and-renewable-energy
I'd also say that the argument for bitcoin as an alternative to petro-dollars is an argument for any other currency, not just an argument for bitcoin.
Hi Thoralf and thanks for your comment. Your article is way more developed than mine and super interesting.
"I argue that it isn't if most of the renewable energy that bitcoin miners helped finance goes back into powering bitcoin miners instead of replacing existing carbon-intensive electricity generation.": I think that a non-zero % of the renewable energy that Bitcoin mining helped finance will go to non-Bitcoin usage. So in that case it will still increase the renewable % in the (non-Bitcoin) national energy mix. Or did I misunderstand something?
Also, renewable energy so far seems to have a price that is decreasing with usage: the more people use renewables the cheaper it gets (because it drives investment in the field? allows economies of scale? I don't know enough). If this continues to be true then Bitcoin mining will have, indirectly, a positive impact on the overall market by making renewables cheaper. (let me know if I'm wrong)
"the argument for bitcoin as an alternative to petro-dollars is an argument for any other currency": Yes. Still, I think that strong fiat currencies (potential alternatives to the US dollar) are enforced by the military power of the State. They're probably not as "dirty" as the US dollar from an environmental point of view, but still terrible.
Yes to your first two points. Lancium indeed says that bitcoin miners will create 10% more renewables than they will consume (looks like their paper isn't online anymore so can't link). And yes the more you deploy a technology, the cheaper it will get (Wright's law). I'm sure not sure how big of an impact those will be though. And the benefits we get there could also cancel out by the fact that some renewables would have happened even without bitcoin miners, and that their clean electricity would have replaced carbon-intensive generation but now are used to power bitcoin miners. One thing seems sure to me, it's that the conclusion isn't as clear as some would like it to be.
Excellent summary of the current clearest thinking on the Bitcoin energy matter!
If a person wants a knee-jerk Bitcoin negative to point to re: energy, they will always find that "Bitcoin boils the oceans" convinces people with no prior knowledge. But, as we investigate how energy production works at a grid level infrastructure, we see how mining can be an amazing tool to smooth demand and boost profit margins on waste energy.
I'm confident that the false narrative will slowly crack, Soviet style, and the beneficial technology will win out despite much shunning. I think Exxon and ConocoPhilips have publicly admitted to some trial flare gas mining, which is solving a real and costly problem.
Ultimately, as Antoine so clearly points out, you either find value in Bitcoin or you don't, and that will matter more in your cost/benefit analysis than any other factor.
"I'm confident that the false narrative will slowly crack": I'm not as confident... Bitcoin has been here for a while and we still hear that it's only for criminals even though there's clear data it's not the case.
Regarding flare gas, I didn't mention it because it would make the picture more complex. It represents apparently 3-4% of all gas produced (found that figure on Wikipedia). So if Bitcoin is mined using that, will ESG advocates reduce the Co2 emissions of gas by 3-4% and attribute these emissions to Bitcoin mining? Or will they keep counting these emissions as a byproduct of fossil fuels and then count 0 for Bitcoin mining? (most likely, they'll double count, which I think would be dishonest, and say that the Co2 emitted counts for both fossil fuel extraction and Bitcoin mining haha)
Nice job steelmanning the climate argument for bitcoin!
I also looked into this recently, and my take is a bit more nuanced. Yes bitcoin miners accelerate renewables, but is that really good for the planet in itself? I argue that it isn't if most of the renewable energy that bitcoin miners helped finance goes back into powering bitcoin miners instead of replacing existing carbon-intensive electricity generation. See https://climatechain.substack.com/p/bitcoin-miners-and-renewable-energy
I'd also say that the argument for bitcoin as an alternative to petro-dollars is an argument for any other currency, not just an argument for bitcoin.
Hi Thoralf and thanks for your comment. Your article is way more developed than mine and super interesting.
"I argue that it isn't if most of the renewable energy that bitcoin miners helped finance goes back into powering bitcoin miners instead of replacing existing carbon-intensive electricity generation.": I think that a non-zero % of the renewable energy that Bitcoin mining helped finance will go to non-Bitcoin usage. So in that case it will still increase the renewable % in the (non-Bitcoin) national energy mix. Or did I misunderstand something?
Also, renewable energy so far seems to have a price that is decreasing with usage: the more people use renewables the cheaper it gets (because it drives investment in the field? allows economies of scale? I don't know enough). If this continues to be true then Bitcoin mining will have, indirectly, a positive impact on the overall market by making renewables cheaper. (let me know if I'm wrong)
"the argument for bitcoin as an alternative to petro-dollars is an argument for any other currency": Yes. Still, I think that strong fiat currencies (potential alternatives to the US dollar) are enforced by the military power of the State. They're probably not as "dirty" as the US dollar from an environmental point of view, but still terrible.
Yes to your first two points. Lancium indeed says that bitcoin miners will create 10% more renewables than they will consume (looks like their paper isn't online anymore so can't link). And yes the more you deploy a technology, the cheaper it will get (Wright's law). I'm sure not sure how big of an impact those will be though. And the benefits we get there could also cancel out by the fact that some renewables would have happened even without bitcoin miners, and that their clean electricity would have replaced carbon-intensive generation but now are used to power bitcoin miners. One thing seems sure to me, it's that the conclusion isn't as clear as some would like it to be.
Excellent summary of the current clearest thinking on the Bitcoin energy matter!
If a person wants a knee-jerk Bitcoin negative to point to re: energy, they will always find that "Bitcoin boils the oceans" convinces people with no prior knowledge. But, as we investigate how energy production works at a grid level infrastructure, we see how mining can be an amazing tool to smooth demand and boost profit margins on waste energy.
I'm confident that the false narrative will slowly crack, Soviet style, and the beneficial technology will win out despite much shunning. I think Exxon and ConocoPhilips have publicly admitted to some trial flare gas mining, which is solving a real and costly problem.
Ultimately, as Antoine so clearly points out, you either find value in Bitcoin or you don't, and that will matter more in your cost/benefit analysis than any other factor.
"I'm confident that the false narrative will slowly crack": I'm not as confident... Bitcoin has been here for a while and we still hear that it's only for criminals even though there's clear data it's not the case.
Regarding flare gas, I didn't mention it because it would make the picture more complex. It represents apparently 3-4% of all gas produced (found that figure on Wikipedia). So if Bitcoin is mined using that, will ESG advocates reduce the Co2 emissions of gas by 3-4% and attribute these emissions to Bitcoin mining? Or will they keep counting these emissions as a byproduct of fossil fuels and then count 0 for Bitcoin mining? (most likely, they'll double count, which I think would be dishonest, and say that the Co2 emitted counts for both fossil fuel extraction and Bitcoin mining haha)