Bitcoin Energy Consumption Critics Fail To Acknowledge The Damage Done By Fiat Currencies Such as US Dollar
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When Elon Musk tweeted that Tesla was taking off the ability to buy the electric cars using Bitcoin last week, all hell broke loose on Twitter as true believers of the digital currency didn’t find any substance in the reason offered for the decision. He argued that Bitcoin consumes too much energy to mine and damages the environment, irritating many on crypto Twitter.
Part of the tweet read:
“We are concerned about the rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel. Cryptocurrency is a good idea on many levels, and we believe it has a promising future, but this cannot come at great cost to the environment.”
Fuel was added to the fire when Square’s CFO added that the company didn’t plan to buy more Bitcoin, and they were working towards a greener future through the Bitcoin Clean Energy Initiative. The tweets saw many Bitcoin supporters question what alternative the likes of Tesla have, and if it was fiat such as the US dollar, why did they not discuss the carbon footprint of minting fiat currency.
Dan Held, Growth Marketing director at Kraken, was quick to share a table of the energy used by various industries compared to Bitcoin before posing the question of if Tesla intended to stop accepting US dollars in line with their environmental protection plan.
The table shows gold mining costs around $105 billion per year consuming 475M GJ of energy. Gold recycling costs an additional $40 billion each year and consumes 25M GJ. Paper currency and minting is third on the list costing $28 billion and consuming 39M GJ. The entire banking system costs about $1,870 billion and 2,340M GJ. The governments cost about $27,600 billion and use about 5,861M GJ. And finally, Bitcoin mining cost only $4.5 billion but consumed 183M GJ.
Interestingly according to Gabor Gurbacs, Director at VanEck, 76% of Bitcoin miners use renewable energy sources, and 39% of the total miner energy consumption was coming from renewables. This means the Bitcoin mining industry is one the most energy renewable focused industries with aligned incentives for the long-term.
US Dollar Carbon Footprint Military Ties
Some experts questioned the carbon footprint associated with minting the US dollar and its ties with military violence, which isn’t only harmful to the environment but humanity. Some people believe that the US government maintains military forces abroad just for hegemony and maintaining the US dollar as the world reserve currency. And in doing so, the US military consumes more carbon than many entities on the planet.
Bruce Fenton, the founder of Watchdog Capital; responded to Musk by claiming;
“An M1 Abrams tank uses jet fuel that costs $5 a gallon (3-10x delivered). It burns a gallon a minute when driving, a gallon every 5 min when idle. In Afghanistan, they leave the tanks on all night. The war has been going on for two decades. Don’t @ me about Bitcoin energy usage.”
The US military protects the petro-dollar and keeps it strong, uses massive amounts of fuel to achieve this, and has the biggest carbon footprints on the planet.
However, the military’s contribution to global warming isn’t accounted for since the US government pressured other governments negotiating the 1992 Kyoto Protocol to agree that emissions caused by military activity wouldn’t count as national emissions and they would not have to be reported.
The argument is quite valid, and critics of Bitcoin shy away from addressing such issues.