Bitcoin "environmental killer theory" increased dramatically! Satoshi Nakamoto thought long ago: gold is more wasteful

For some, Bitcoin heralds a new financial system of the future; but many others see it as an environmental disaster. Bitcoin enthusiasts may shrug off critics, but if Bitcoin is to become widely adopted, it will have to overcome the naysayers one by one.

Bitcoin has experienced a long-awaited bull run this year, and people are also concerned about its increased "carbon footprint". Bill Gates, co-founder of Microsoft, who once turned neutral on Bitcoin, said in an interview in February that he does not support Bitcoin, mainly because mining produces a large carbon footprint.

In theory, Bitcoin is a completely digital currency, and at first glance it seems to be the most environmentally friendly currency ever. After all, unlike paper money, Bitcoin does not require cutting down trees to produce, and its supply is limited, so there will be no additional issuance.

However, there are growing concerns in the mainstream media about whether Bitcoin consumes huge amounts of energy.

In February, The Guardian published a video report titled "Why Bitcoin is Bad for the Planet"; Reuters criticized Tesla for promoting clean energy on the one hand and investing $1.5 billion in "energy-intensive" Bitcoin on the other; The Washington Post also pointed out that buying Tesla cars with Bitcoin has a negative impact on the environment.

Bitcoin may always consume a lot of energy

No matter which metric is used to compare, Bitcoin does consume a lot of electricity. The reason is that Bitcoin uses a consensus mechanism called PoW, which allows miners to compete to solve cryptographic problems. Whoever gets first can receive the reward for the block.

In order to remain competitive, miners are forced to join the arms race with their hardware equipment; using more powerful computers will naturally increase energy consumption. Senior executives of Canadian Bitcoin mining company Bitfarms admitted that as long as Bitcoin is still used, it may always consume a lot of energy.

According to a recent analysis report by Cambridge University, Bitcoin consumes more energy than Argentina, the Netherlands and other countries, about 121.36 terawatt hours (TWh) per year. If Bitcoin were regarded as a country, its electricity consumption would rank among the top 30 in the world.

However, since entering the Internet age, whether sending emails, using social media, or doing online banking, all of these have increased human carbon emissions. In this environment, is Bitcoin really the main contributor to carbon emissions? Is it an exaggeration to think that Bitcoin is responsible for the deterioration of the environment?

Satoshi Nakamoto had already thought of it

Criticism of Bitcoin also led to the revelation of a statement made by Bitcoin creator Satoshi Nakamoto on the Bitcoin forum BitcoinTalk in 2010. After that, Nakamoto disappeared from people's sight, and no one knows his or their true identity to this day.

Satoshi Nakamoto wrote:

Bitcoin makes transactions possible at a cost far greater than the cost of electricity, so not having Bitcoin is pure waste.

Before the birth of Bitcoin, the concept of digital currency had already appeared and been put into practice, but it had never achieved the huge success of Bitcoin. Satoshi Nakamoto believed that Bitcoin "must" involve provable energy consumption, otherwise there is no other way to fairly distribute the value of digital units to the world in a decentralized manner.

Satoshi Nakamoto used gold as an example to explain:

(Bitcoin mining) It’s the same situation with gold and gold mining. The border costs of mining gold tend to converge to the price of gold. Mining gold is also a waste of resources, but the consequences of this waste are far less than the benefits of using gold as a medium of exchange.

Similar to Bitcoin, gold mining is energy intensive and involves a lot of capital expenditures. In addition, the mining industry is a completely free market, and miners are often exploited, leaving the people who really do the hard work to earn the lowest wages.

In addition, Satoshi Nakamoto has also foreseen that in the future, countless developers will build Layer 2 solutions on the Bitcoin blockchain to improve energy efficiency and transaction speed without damaging the transparency of Bitcoin transactions. Research on Layer 2 such as Liquid and Lightning Network has also been going on for many years.

In addition, the proportion of miners' energy consumption using renewable energy continues to rise. According to the "Global Cryptocurrency Indicators Study" published by the Cambridge Center for Alternative Finance (CCAF) in September last year, up to 76% of miners use electricity containing renewable energy, and even 39% of miners "only" use renewable energy.

However, accusations that Bitcoin causes environmental harm will continue to emerge for the foreseeable future.