In March, The New York Times declared to its readers that a “single bitcoin transaction currently needs quite 2,000 kilowatt-hours of electricity or enough energy to power the average American household for seventy-three days”.
The claim can have appeared credible to most people who eye bitcoin with deep suspicion. It coincided with the launch of a lobbying campaign by Greenpeace that directly joined bitcoin’s proof-of-work mining system to climate change. At the same time, lawmakers within the European Parliament voted on a proposal to ban bitcoin’s energy-intensive type of mining (but set against doing so).
For anyone not intimately acquainted with the planning and purpose of the bitcoin network, it’s becoming increasingly difficult to support the cryptocurrency while not muzzling your environmental conscience. Yet bitcoin isn’t the gas-guzzler delineated by The New York Times and others.
The newspaper ought to have told its readers: the energy needed to keep bitcoin running is thus immense that – once measured against the presently low levels of user engagement – individual transactions seem to replicate a high cost of capital.
That statement is factually accurate; it acknowledges that bitcoin’s environmental impact would be harmful if the network weren’t scaled up with efficiency, but it also places the status established order in its correct context. Bitcoin transactions flatly don’t use 2,000 kilowatt-hours of electricity; they occur within the blink of an eye with a short string of text entered into the network’s transaction ledger; they cost no more than sending an email.
Of course, it’s true that, behind the scenes, the towering digital infrastructure that supports bitcoin – just like the sprawling web of data centers and exchange points that hosts the internet – is capital-intensive and expensive to take care of. But, just like the internet, bitcoin is worthwhile.