Obi Nwosu is the CEO and co-founder of Coinfloor, the UK’s longest-running Bitcoin exchange. He has over 20 years’ experience building online marketplaces and bringing virtual currencies to tens of millions of people. Obi writes The Road to Bitcoin Hegemony, a weekly recap of some of the most impactful developments in Bitcoin.
Attack of the Energy PRATTs
What do you do when all your arguments against Bitcoin have been proven bunk and every one of your predictions of its demise has fallen flat on its face? You try a new angle of attack, of course: one that harnesses your knee-jerk antipathy to a hot-button issue that everybody cares about.
On Friday we saw this approach rear its head in the form of pearl-clutching concerns about Bitcoin’s electricity footprint, with a big story on the BBC warning that energy could “burst Bitcoin’s bubble.” This is risible for many reasons, not least because it deploys a number of PRATTs (points refuted a thousand times).
First, let’s look at what they’ve got right. (This won’t take long.) Yes, Bitcoin has a high energy footprint, with mining operations, by some accounts, consuming around 110 terawatt hours (TWh) of electricity. The BBC and many other mainstream media outlets have had hours of fun using these figures to blame Bitcoin for climate catastrophe.
But compare this with streaming media, and it starts to look pretty insignificant. The IEA estimated that Netflix’s 167m subscribers account use 94 TWh, while YouTube, with over 1 billion viewing hours a day, consumes 600 TWh a year. That’s hardly surprising when just one video—Despacito, feat. Justin Beiber—was responsible for 900 GWh on its own.
Still, it’s undeniable that much energy goes into mining and transacting coins. But this ignores the fact that data centres are increasingly powered with renewables. Indeed, the technology sector is largely responsible for a nearly 50% rise in demand for corporate renewable procurements last year and Bitcoin miners are even more incentivised to demand green electricity.
But there’s only so much green energy to go around, right, so why should we spend it on Bitcoin? This is another oft-refuted point. There is no shortage of green energy: the sun, our ocean currents and tides, the wind and geothermal: humanity has barely begun to tap these sources; we’re still decades or more away from reaching the first level on the Kardashev Scale, harnessing all the energy available to our planet.
Every day over 5,000 times more solar energy strikes the Earth than the total amount of energy humans actually use. The reason we can’t use more sunlight, or tidal and wind for that matter, is that most of it exists far away from where it is most needed. That was until 12 years ago, when Bitcoin became the first utility that could turn energy into value independently of its proximity to civilization?the proof of work that underpins it means miners seek out the abundant, decentralised, and unused renewable energy that blankets the globe.
There’s another important question that the PRATTs conveniently ignore. They think Bitcoin is a hobby, a fad, a speculation, and this entirely misses the point that I’ve repeatedly made in this column. Bitcoin is a valuable utility; a means to store wealth in an increasingly uncertain world; a way to help billions of unbanked people around the world take charge of their financial future.
There are so many ways to refute these lazy arguments, so I’ll restrict myself to one more. One of the biggest drawbacks of renewables is that they are unpredictable: the wind doesn’t always blow, nor the sun shine, when we need electricity most. Bitcoin, which can be mined at any time, is a perfect way to eat up surplus renewable energy when demand is low.
As such, Bitcoin acts as a giant battery for the grid, turning energy into value that is impervious to attacks from even the most powerful PRATTs in the world. Don’t let doom mongers guilt you into divesting. Every time you see a wind turbine or solar array, know that your Bitcoin investment, in its own small way, is helping transform the planet for the better in myriad ways.