Bitcoin and Energy Use Problem

A common complaint about bitcoin is that it uses too much energy. The argument is that it uses the power of small countries and causes instability to the grid. Below are some arguments to show this is just fear-mongering around it. Especially coming from vested interested parties like gold bugs or bankers or government officials:

It is wasted energy – Energy use has been going up has been constant for the last 300 years. The more energy humans have been using the better our lives are. If energy is providing value, then it isn’t being wasted. 

Transaction volume is two small- high values would be on the blockchain. Lower value transactions are 2nd layer protocols that are being built on top. The lighting network allows for lower transaction time and fees and is built upon the bitcoin network. It will allow for smaller transactions not to be needed in the block. The big players will use the blocks for transactions. It is similar to how the internet has multiple layers. 

What about how much energy we use for the modern bankings system and the military-industrial complex? – To judge bitcoin on its merits, we need to compare it to our current fiat money system. It’s impossible to measure the current system. Still, it takes considerable energy to keep all the banks running as well as the military-industrial complex to back them. 

Blockchain incentives help stranded renewable sources. The grid is costly to construct. An issue is a lot of areas where we have energy; we don’t have enough grid capacity to transmit it. Blockchain technology takes many resources and incentives to find the cheapest energy sources. You aren’t most likely creating new energy sources for bitcoin, just reallocating existing sources. 

The high resource uses in bitcoin also make the network more secure. The miners have to play by bitcoins rules because it gets paid that way. The small transaction value makes it easier to have a bitcoin node; with more distributed nodes, the more verification on the network. 

Bitcoin has low friction way to transact money overseas. Try to send money to zimbabwe and see how fast it goes. I think the experience will help see why we need an ownerless intermediary. 

Some resources relating to this:

https://www.theinvestorspodcast.com/bitcoin-fundamentals/bitcoin-mining-and-energy-w-marty-bent-and-harry-sudock/