One of the biggest myths to come along in recent years is that the mere existence of the cryptocurrency Bitcoin is not only bad for the environment but is set to plunge the world into global warming chaos and catastrophe. Does the mining of Bitcoin use electricity? Yes. Does it use any more than standard banking or credit card transactions? No. So, what’s the crisis? The crisis is one of misinformation rather than a coming electricity shortage, rising sea levels, and collapsing national economies. Here are some facts to know about Bitcoin trading and the cryptocurrency behind it.
The Crisis is Purely Theoretical
So far, it’s been difficult to prove that the creation of cryptocurrency though mining has caused or even threatened to cause an energy shortage, increase in atmospheric carbon, or worse pollution. In fact, the entire concept of BTC being an electricity gobbler of crisis proportions is theoretical. Mining is becoming more widespread, but so is stock trading, the use of computers, digital books, and smartphones. Why are there no revolutions to stop people from making phone calls, reading e-books, taking part in e-commerce, or trading securities via brokerage apps?
Creating Wealth Always Costs Something
It always costs something to build wealth. If you are one of the many working people who use a computer each day, you’re consuming electricity with every stroke of the keypad. But as a society we don’t worry about the expense as long as what we produce is greater in value. It’s the same with Bitcoin. Miners stop working whenever the cost to produce new value exceeds the reward. It’s simple economics.
We cut down trees to create furniture, mine valuable metals from the earth to build cars, houses, and jewelry. Most every product we use in our daily lives uses some form of energy in its production. The fact that cryptocurrency is new and threatens to dislodge the old economic system of nation-based money might have something to do with the full-out journalistic assault on BTC and the entire family of virtual money. As alternative currencies gain more social acceptance by citizens, not by governments, look for more of a push against all the major coins, not just the market leader. Today, it’s an electricity consumption crisis, but next year we might hear how cryptocurrency destabilizes national governments, eats away at tax revenue, or causes butterflies to wither up and die.
Beware of the Two Big Myths about BTC
Watch out when journalists who write on this topic speak about the energy expenditure of crypto-coin mining. First off, it’s electricity specifically, not all forms of energy. Rarely do news writers make the distinction. One reason they don’t is that when you compare what it takes to mine one Bitcoin, it’s relatively insignificant. The other myth pertains to whether the coin will consume more power over time. There’s a lot of debate about the issue, but no one can prove definitively that BTC mining uses more power each year. If anything, it uses less as computers and mining software get more efficient.