Critics Condemn Bitcoin’s Electricity Consumption, But it’s a Nonissue
Bitcoin’s electricity consumption has become the target of criticism recently, and some reports by the mainstream media have claimed that the cryptocurrency may contribute to climate change in the long-term because of its excessive use of energy.
Years of Attacks
Since its launch in 2009, various critics and the members of popular media have attempted to condemn bitcoin to deliberately degrade its reputation and mislead the public about the different values of the digital currency.
Bankers have stated that bitcoin is a scam, central banks have claimed that the digital currency operates as a money laundering tool, and lately, some media outlets have been recycling the recent narrative that its production consumes too much energy.
As crypto-security and expert Andreas Antonopoulos previously explained, Bitcoin miners and mining center operators have continuously relied on renewable energy in regions where various sources of clean energy are abundant. The move into these areas comes primarily from the fact that electricity generated and supplied by state-run energy grids force miners out. The cost to run a mining operation under national banners significantly increases the operating expenses of cryptocurrency mining companies.
Over the past few years, mining centers have relocated to regions like the mountainous region of Northwest China, Norway, Chile, and Eastern Europe to capitalize on colder climates and cheap renewable energy produced by solar panels, wind turbines, and hydroelectric power plants.
In some countries like Chile and China, for instance, electricity generated from massive solar power plants are so abundant that the two countries have relied on clean energy to power cities for long periods of time.
In June, Climate Action, a partner of UN Environment, revealed that the Qinghai Province, located in Northwest China, has run on 100 percent renewable energy for an entire week. Several cities in Chile have also run on clean energy for a whole year, for 365 days straight.
“The trial – which ran from [June 17] to [June 23] – saw the entire province generate all of its power needs with clean energy sources, including solar, wind and hydropower. The trial in the Qinghai Province – which has a population of around [six] million people – was designed to prove that fossil fuels will not be required in the future, according to local reports,” read the report from Climate Action.
Most mining centers prefer to utilize clean energy and renewable energy sources for two significant reasons: dependence on local energy grid operators provide authorities the power to shut down Bitcoin mining centers at their demand, and usage of non-renewable electricity drastically increases operating costs of mining centers.
On November 14, CnLedger, a trusted cryptocurrency news source in China, reported that the Sichuan Electric Power Company had issued a false statement that the use of electricity to produce bitcoin is illegal. The head of the company immediately followed up that it does not have the authority to determine whether Bitcoin mining is illicit or not. But, the initial report from the group triggered a series of rumors on a potential mining ban by the Chinese government.
“A county electric power company in Sichuan, CN, released a notice to local hydro-power station: as bitcoin mining is illegal, all stations should stop producing bitcoins. Or they are no longer allowed to be connected to the grid. However, head of the company clarified to Caixin today that the notice was made in a hurry; it is not their role to determine whether bitcoin mining is against the law. The company is not yet connected to a national grid, and relies on local stations to get electricity,” CnLedger translated a report from Caixin, a state-owned news publication.
Given that dependence on grid operators and local authorities for the supply of electricity could very likely lead to business disruption and unstable operations, mining centers have started to relocate and utilize clean energy to produce bitcoin.