The central theses
- The popular cryptocurrency exchange Coinbase has commented on Bitcoin’s environmental impact and energy consumption.
- It is said that while Bitcoin mining is energy intensive, the process is largely based on renewable energy.
- It is also said that cryptocurrency firms are promoting the use of renewable energy in Bitcoin mining.
Share this article
Coinbase has published a statement on Bitcoin Mining’s energy consumption, arguing that the process has minimal environmental impact.
Bitcoin relies on renewable energies
“Bitcoin mining is an energy-intensive process,” wrote Coinbase. “There’s no debate about that.” However, the company says it is a myth that Bitcoin “is a significant contributor to climate change.”
To argue this point, Coinbase noted that mining companies have incentives to find cheap energy, which usually means they use renewable energy sources and excess energy sources.
Half of all bitcoin mining has been found to come from Sichuan, China, where excess hydropower is heavily used.
Eventually, Coinbase found that the crypto industry is concerned with energy consumption. Companies like Square, Greenridge, and Argo Blockchain are leaders in promoting clean bitcoin mining.
Other sources also use energy
Coinbase acknowledged that Bitcoin uses just as much energy as Norway. However, this has been contextualized by finding that Bitcoin secures more than twice as much economic value as Norway.
“Consider this: Norway’s GDP is around $ 400 billion. [but Bitcoin’s market cap] was as high as $ 1 trillion, ”Coinbase wrote. “It’s not easy to make a head-to-head comparison, but the most important thing is that you remember it everything consumes energy. “
The company also found that energy wasted from inactive home devices is equivalent to 1.5 years of bitcoin mining. It added that Bitcoin uses less energy than gold mines, banks, and ATMs.
Coinbase also denied claims that Bitcoin would use 14 times more energy than a traditional payment network to process 1 billion transactions. Since energy is consumed per block and not per transaction, transaction aggregation can increase Bitcoin’s efficiency.
Bitcoin mining is causing controversy
Coinbase’s comments come weeks after Tesla announced its decision to temporarily suspend Bitcoin transactions because of energy consumption and look for a less intense alternative.
This decision sparked a broad discussion about mining. and Coinbase isn’t the only organization responding to the controversy. The Ethereum Foundation also responded to Tesla’s decision, stating that Ethereum 2.0 will reduce energy consumption by 99%.
In the meantime, FTX and BitMEX have committed to becoming climate neutral through donations to offset emissions.
Critics are likely to continue to argue that Bitcoin’s reliance on renewable energy is exaggerated. Conservative estimates put 39% of the Bitcoin mining hashrate using renewable energy.
Disclaimer: At the time of writing, this author held less than $ 75 in Bitcoin, Ethereum, and Altcoins.
Using Ethereum reduces power consumption by 99%
According to a new blog post by Carl Beekhuizen of the Ethereum Foundation, Ethereum will cut its energy consumption by 99.95% after transitioning to proof-of-stake. How much less energy …
What are non-fungible tokens (NFTs)?
Tokenization works well for commodities like fiat currencies, gold, and physical land. By displaying a fungible asset on the blockchain, goods can be traded around the clock via limitless and smooth transactions. Fungible goods are …
The crypto market falls after Tesla stopped Bitcoin payments
Tesla’s Bitcoin U-turn drops crypto assets. Tesla stops Bitcoin payments Tesla no longer accepts payments in Bitcoin, Elon Musk has announced. The self-described “Technoking of Tesla” lasted …
Square Inc. hopes to go green with Bitcoin
Square, a payments company led by Twitter founder Jack Dorsey, intends to go carbon neutral, according to a new press release. CO2 neutral by 2030 Square announced on December 8th …