Bitcoin will lead the world to a greener future
The greenest energy and the healthiest currency have more in common than they seem.
Bitcoin and green energy are both holistic revisions of old systems – bitcoin, bank-arbitrated financial systems and government inflationary policies and renewables, of an industry monopolized by Big Oil and big money. Bitcoin and renewables will help corporations generate new infrastructure to decisively shape our future in a direction that is either sustainable for the masses or profitable for the privileged few.
Investing in globally efficient renewable energy projects in a relatively short timeframe is an existential imperative for human society. In order to substantially reduce global greenhouse gas emissions to the levels recommended by the Paris climate agreement, countries must undertake rigorous initiatives to build (and rebuild) basic infrastructure, such as the systems and structures underlying our manufacturing, mining and construction sectors. Unfortunately, there are many obstacles to overhauling the way businesses consume energy, more entrenched in some countries than others. In the United States, a stronghold of corporate lobbying money, government allegiances, and a vast network of existing infrastructure are making change an uphill battle, with enemies on both sides of the aisle.
Likewise, politicians in developed countries such as the United States also have many reasons to resist the adoption of bitcoin. Bitcoin categorically eliminates government control of the money supply because a fixed amount of bitcoin moves over a decentralized peer-to-peer transaction network. The glaring inadequacies of government-controlled financial systems and the increasingly obvious global use cases for bitcoin have recently sparked an increase in interest in bitcoin, generating momentum towards its adoption by investors large and small. . A growing number of people and institutions are seizing the power of bitcoin to provide democratized access to wealth free from inflationary risks, middle fees and exclusionary banking processes that have maintained 31 percent of the world’s population unbanked.
Recently, El Salvador announced that it is adopting bitcoin as legal tender and that it is considering using its geothermal energy of volcanic origin to generate electricity for the mining industry. The country’s current geothermal capacity has exceeded its industrial production, resulting in inefficient energy consumption.
Meanwhile, lawmakers across the world have subjected bitcoin to a scathing lawsuit in a central bank digital currency (CBDC) hearing where Senator Elizabeth Warren (D-Mass.) Denounced its consumption. energy and price volatility, to declare it is a “ugly way to buy and sell things” and “a haven for illegal activities”. Ironically, as a developing country with a less than robust economy has announced its intention to use bitcoin as a key driver of green energy initiatives, producing potentially transformative socio-economic and environmental benefits for its residents and others – Beyond that, a global economic superpower has summoned its legislators to take a broad targeting of cryptocurrencies.
The two stories are very opposite. One, from the Senate, is an indictment of the environmental impact of bitcoin ignoring its potential ability to encourage development in the renewable energy sector. The other, from El Salvador where 70 percent of the population remains unbanked, involves a rapidly developing plan to use geothermal energy to support bitcoin mining in the country, effectively creating zero-emission mining operations to foster adoption and circulation of the form of most democratically accessible and secure money. The United States accuses bitcoin of destroying the environment, while El Salvador simultaneously sets in motion a practical application of how bitcoin can, in fact, help cure it. Why the gap?
As we consider strengthening the future of renewable energy and laying the foundations for a financial system that democratizes access to capital, we may well find that the most forward-thinking countries are the developing countries. These are nations that did not benefit from the unevenly distributed wealth of the old financial order, and therefore lack the allegiance to the trust capital that is deeply ingrained in our government and its lobbying money. Additionally, as the United States faces increasing levels of inflation, its fiat currency allegiance is at particularly high stakes.
The dollar’s already rising inflation rates will ostensibly make the bitcoin argument more obvious and intuitive to people around the world, forcing them to take a more critical look at government-issued currency. It is therefore incumbent on politicians loyal to the central banking system to stifle the bitcoin argument in any way possible, even if that means denying its beneficial applications and potential to boost investment in renewable energy.
Arguments criticizing bitcoin’s energy consumption turn a blind eye to the comparable, if not superior, energy expenditure of the traditional banking system. A $ 10 bill has a estimated lifespan 5.3 years while that of a $ 5 note is estimated at 4.7 years. Paper money requires a large amount of natural resources to produce and reproduce, including water, ink, cotton, linen and metal, providing the valued Global production costs of paper money in 2014 at 5 terawatts per year and 10 billion liters of water.
Commercial banking also consumes colossal amounts of energy between the costs of servers, branches and ATMs that keep banks and their resources accessible to the public. According to world Bank, there were 11.5 branches of global commercial banks per 100,000 adults worldwide in 2019. Considering a population of approximately 7.8 billion people with 70 percent adults, this represents nearly 630,000 branches worldwide, each of which uses electricity 24 hours a day for lighting, cooling systems and computers. ATM networks alone are also significant electricity costs with at least $ 3.5 million used worldwide, not to mention air conditioning and lighting used for 24/7 ATMs. / 7.
Therefore, a holistic assessment of traditional banking energy costs reveals that bitcoin can actually consume a fraction of the energy of its predecessor. In light of this, it seems absurd that one rarely, if ever, hears an objection from the political ranks. Arguments like Warren’s that “cryptocurrencies like bitcoin are terrible for the environment” are therefore unbearable given that the global adoption of bitcoin as a currency has the potential to significantly reduce current levels. in the energy consumption of our monetary systems around the world.
For developing countries, adopting bitcoin can have huge long-term financial benefits. El Salvador’s financial landscape resembles that of many developing countries which include 80 percent of the world’s population. There, with a decisive majority living in poverty, a financial system subordinate to the whims of the national government has clearly failed its people. The adoption of bitcoin, a currency insensitive to government manipulation, in developing countries may allow unbanked masses to secure their bitcoin wealth away from fluctuating money supply and the catastrophic effects of inflation and worse, hyperinflation.
The initiatives planned by El Salvador have the potential to revolutionize the future of both renewable energy and access to healthy currency. Driven by profit, miners will gravitate to where electricity is cheapest, stimulating local economic development as well as that of the renewable energy industry. Countries with renewable energy capacities where industrial activity does not consume enough total energy production, waste large quantities of this energy by this excess. Renewable energy remains largely inefficient in many places as storage technology lags behind production capacity resulting in a cyclical waste process in which large amounts of energy are produced at certain times. of the day (such as in the morning, when solar energy is most plentiful) which are often out of sync with peak times.
The combination of mining operations and renewable energy offers a tremendous opportunity to create essential economic development in developing countries. El Salvador and other developing countries may be the perfect testing ground for large-scale bitcoin development, for many reasons. For largely unbanked populations, the benefits of a currency that does not require a local or central bank are powerful. People disadvantaged by the effects of unstable governments on local currencies also stand to gain from a non-government currency, and local economies in developing countries can benefit from inviting businesses and professionals. growing bitcoin mining industry.
Developing countries are also likely to be more willing to promote the development of the young bitcoin industry and to experiment, as in the case of El Salvador’s geothermal energy initiatives, with innovative ways to produce supporting infrastructure for mining. due to a weaker allegiance to the virtues of the dollar. and more flexible regulatory standards.
There are plenty of incentives to combine bitcoin mining with renewable energy production, and the strategy can be deployed effectively in many other countries with less than buzzing economies. Bitcoin mining has become popular in Iceland, a country that is home to large amounts of geothermal energy that is not allocated efficiently. When used for bitcoin mining, new potential emerges to convert energy into healthy money. Using renewable energy to mine bitcoin has the potential to disrupt the global economic order in the long run, spurring industrial and technological growth in countries around the world.
The facade of using environmental concerns must be seen for what it is: an attempt to protect the deep-rooted global dependence on highly centralized fiat currency and strengthen belief in the dollar amid the pressures inflationary following a large injection of aid money.
Countries that fail to recognize the potential of bitcoin due to their stubborn allegiance to archaic fiat systems and short-sighted environmental concerns will not only be left behind on the path to progress through innovation, but will slow progress. low cost and disadvantageous renewable energy technologies. the global fight for climate justice.
The opinions expressed in this article are those of the author.