Mining the Truth: Bitcoin's Evolving Environmental Story
A shift is underway when discussing bitcoin mining's environmental impact. Recent headlines and studies are challenging old narratives, shedding light on misconceptions that have long plagued the industry. Are we on the brink of a new understanding? The latest insights suggest we might be.
It may be premature to comment on a sea change in the narrative surrounding the environmental impacts and benefits of Bitcoin mining, but over the past few months the prevailing message in terms of news stories and academic or financial publications does appear to have shifted. At the very least, some of the most recent material directly addresses many of the misunderstandings and misrepresentations with which the mining industry has traditionally had to contend.
One such paper is the recent publication by KPMG (authored by Brian Consolvo and Kirk Caron). Reading the piece is a rare experience for a Bitcoiner. Here, we finally discover a respected and traditional commercial adviser giving a correct description of how mining works – whereas most mainstream publications describe mining (incorrectly) as ‘solving complex mathematical problems,’ the authors here provide a far more accurate summary of the process as ‘repeatedly hashing a block of transactions until a specific output is achieved’. The fact that reading such a vastly improved description is a surprise at all is a sad indictment of the quality of most of the material that has been put in front of the general public to date.
But the authors do not stop here. They go on to note, correctly, that Bitcoin mining is in fact a zero emissions business, and the question regarding emissions really relates to how we, as a society, generate our electricity. They note that Bitcoin mining has significant potential in terms of re-powering underutilised generation resources, or via the use of waste natural gas (mitigating the effects of the potent greenhouse gas, methane, that would otherwise be released into the atmosphere).
The mining industry’s symbiotic relationship with the electricity grid in Texas is considered in detail, noting also that Bitcoin mining can incentivise increased integration of renewable energy into the grid (as also noted recently by the World Economic forum). Other sections deal with issues of demand response and miners’ potential in recycling heat wherever heating is required for domestic or commercial purposes. Methane reduction receives special consideration – this being an issue that BPUK has consistently highlighted as a hitherto underappreciated weapon that Bitcoin mining can provide in the fight against climate change.
Apart from the environmental and economic benefits, the authors also explore in detail Bitcoin’s potential as a payments system for the unbanked, or the way in which the unique industry of mining is ideally suited to building out microgrids in rural Africa.
In no uncertain terms, this is very much a paper that the BPUK team might have wished to write ourselves. We commend the authors for their thorough research and understanding of the topic, and urge our members and supporters to read the full paper for themselves.