Bitcoin’s Energy Usage Isn’t a Problem

The whole "wasted energy" is just deflection. It almost always isn't. It's a bit like deflection about the energy use being mostly renewable. That really means hydro, because it's generally the cheapest.

But that power use means other capacity (including coal mines) needs to exist. It can mean extra transmission capacity needs to be built. In the case of towns in New York, for example, miners have raised the electricity prices of everyone as municipalities are forced to buy extra capacity on the open market.

Now all of this would be fine if Bitcoin actually provided value commensurate with that energy consumption. It just doesn't. It's not a currency. It'll never be a currency. It's an asset and any uses thus far have been to evade the laws in various countries.

[1]: https://yearbook.enerdata.net/electricity/electricity-domest...

1) The vast majority of the cost of mining (80-90%) is the electricity cost. This contrasts with other hypothetical uses of excess electricity, such as desalination or hydrogen electrolysis, which have much higher capital costs.

2) The mining equipment can be fairly easily relocated, so it can go to where the power is. An example given was how miners would relocate to Sichuan province in China during the wet season each year in order to take advantage of excess hydro power there.

3) Unlike many electricity consumers, such as data centers, which might have the first two advantages, Bitcoin mining does not need reliable uptime. If it is compensated by lower cost of electricity during the up time, nothing stops miners from shutting down for periods of time when power is too expensive, or unavailable.

For these reasons, mining ends up being very well suited to use excess power that currently goes to waste, such as byproduct natural gas produced from oil drilling, excess hydro production, and especially, excess solar and wind production.

This last is important, because in order to do a decent job of providing for regular demand, renewables need to be significantly overbuilt, due to their variable output. That means that if a load is supplied by largely renewable sources, the majority of the time it will necessarily have significant excess capacity. Bitcoin mining can profitably take advantage of this excess capacity, and as a result, can make building such renewables more financially viable.

This was just one part of the article, and the whole thing is worth a read. Not to say that I agree with everything in it, but I certainly found it all - and especially this section - thought provoking.

100 million HODLers. Very rarely do people use Bitcoins to make purchases. When they do, over 99% of them do it through a centralized authority. The centralized authority immediate converts the Bitcoin to fiat currency, which it pays to the seller, so you aren't even really avoiding any inflationary risk. If hyperinflation of the world's reserve currencies actually does occur, there is no guarantee that Bitcoin's valuation will match inflation.

All that we're left with is a vehicle of speculation, which at best provides zero sum utility. It's actually negative sum because losing money is worse than gaining the same amount of money. Christmas lights may also people a waste of electricity, but at least everyone who sets them up presumably enjoys them or at least is doing so for someone else's enjoyment.

Using the energy consumed as a fraction of the entire energy consumption of the planet is a ridiculous baseline.