While bitcoin and a variety of digital currencies have swelled in value, a number of critics have spread fear, uncertainty, and doubt (FUD) in regard to the energy consumption proof-of-work (PoW) cryptocurrencies leverage to produce new units of currency. Just recently the software engineer Stephen Diehl expressed his dissatisfaction over the environmental cost of bitcoin. However, cryptocurrency supporters believe Diehl failed to mention the amount of renewable energy used by a great number of mining facilities, alongside the insurmountable cost to operate today’s banking system.
Bitcoin’s Waste of Energy Argument Is a Fool’s Errand
The latest hot topic within the cryptocurrency industry is the topic of Bitcoin’s proof-of-work (PoW) energy consumption, and whether or not the consumption is efficient. The conversation was sparked by a number of articles published during the last year, alongside software engineer Stephen Diehl’s recent critique of the network’s power consumption.
Besides the fact that Diehl considers the crypto asset to be “a giant smoldering Chernobyl,” he also said that “bitcoin economics [is] a pyramid-shaped investment scheme backed by the collective delusion that value can [be] created out of nothing by convincing greater fools to buy it after you do.”
Diehl’s criticism toward Bitcoin’s energy consumption is filled with obvious fallacies, but he also doesn’t realize how Satoshi’s cryptocurrency network is more energy-efficient than most think. Diehl and many others, also fail to recognize the cost to maintain today’s banking system, which consists of a great number of terawatts dedicated to servers, branches, and automated teller machines.
1/ Bitcoin’s energy consumption is not “wasteful.”
– It is much more efficient than existing financial systems
– No one has the moral authority to tell you what is a good or bad use of energy (ex: watching the Kardashians)