If you’re a bit like me, unable to contain yourself in your enthusiasm about the invention called bitcoin, you will become ‘that bitcoin guy’ in the minds of your friends. Consequently, you will get messages like ‘Hey, here’s an article in such and such mainstream media, which says bitcoin is destroying our planet. Thoughts?’ Depending on the character of the sender, they may or may not explicitly ask you to reconsider your investment in this devilish, ocean-boiling, vaporware money. Let’s give you some ammo for answering the question of “Is Bitcoin bad for the environment?”
If it wasn’t so misguided, it would be funny how the rage of the likes of Greenpeace and American senator Elizabeth Warren is directed at bitcoin in particular. There seems to be something about bitcoin that enrages them more than any other industry that consumes energy, for example, the gold-mining industry, the tobacco industry, etcetera. All these industries are more harmful, not just in terms of CO2 emissions, but also in terms of ecological destruction in the case of the goldmining industry.
Bitcoin Mining Emissions Compared to Other Industries
Consider this image by the Cambridge Centre for Alternative Finance: a visual representation of the CO2 emissions of different industries. In the big scheme of things, Bitcoin isn’t so huge. It makes you wonder why organizations like Greenpeace don’t go after gold mining and the tobacco industry.
But just the argument that Bitcoin is less bad for the environment than gold mining, the tobacco industry, or the US army protecting the dollar, will not be enough to change all critics’ minds. They will also have to let go of the idea that a digital, proof-of-work currency like Bitcoin is ‘backed by nothing’, ‘just belief’, and ‘has no intrinsic value’. Because if they don’t accept that Bitcoin has value, they will still see the bitcoin mining industry as harmful, even if and when it will become carbon neutral.
Let’s first start with the ‘other forms of money also consume energy’ part of the argument. And then tackle the ‘Bitcoin does have value’ argument.
Other Forms of Money are also Backed by Nothing Energy
Bitcoin has ‘no intrinsic value’? What on earth has? Does gold have ‘intrinsic value’? Sure, it has some industrial purposes. But its large use case is sitting in vaults, doing nothing productive. Still, it has been immensely useful to people over the millennia, protecting their savings against inflation.
So what about the dollar, what is it backed by? If you glance at a dollar bill, you will see: ‘backed by the full faith and credit of the American government.’ Wow. Not just the faith, but the ‘full’ faith! And credit! We are so lucky. But seriously, what does this mean? If we cut the fluff, it means:
‘Just trust us. Just trust us that these pieces of paper or numbers on a screen have value.’
But if this foundation is so shaky – after all, trust is easily betrayed – why would anyone want dollars or other fiat currency? Well, the government creates demand for their currency by collecting taxes in their own currency. If you don’t pay taxes, you will go to jail, to put it…
Erik started as a freelance writer around the time Satoshi was brewing on the whitepaper.
As a crypto investor, he is class of 2020. More of a holder than a trader, but never shy to experiment with new protocols.
