Debunking the Environmental FUD of Bitcoin

In response to Congress, Saylor and the Bitcoin community categorically tore apart unsubstantiated claims.

Crypto FUD

In response to a letter sent by Congress to the Environmental Protection Agency (EPA), the CEO of Microstrategy, Michael Saylor, drafted a response alongside prominent crypto names to refute the claims that Bitcoin mining is bad for the environment. 

First of all, there is the FUD. Twenty-three members of the United States Congress sent a letter on April 20, 2022, to the EPA outlining that the agency must ensure that cryptocurrency mining facilities are not violating the Clean Air Act or the Clean Water Act. Under the assumption that mining facilities are polluting communities and “having an outsized contribution to greenhouse gas emissions,” members of Congress are warning against energy-inefficient “Proof-of-Work” (POW) mining technology and the currencies that use it, such as Bitcoin and Ethereum. 

Also among the list of concerns raised are server farms, major electronic waste, and noise pollution. The group requests that the EPA act immediately and investigate the negative environmental impacts of crypto mining. Now it would be naive of anyone, even with baseline knowledge of cryptocurrency mining, to deny the validity of someof the mentioned concerns. For example, if you’ve ever stepped foot inside a mining farm or even run a single miner in your home, you know that noise is an issue. 

Further, you also likely know that your electricity bill will go up. Crypto mining and energy efficiency are not synonymous (yet), but they are not mutually exclusive. So Michael Saylor teamed up with scores of crypto figures including Twitter founder Jack Dorsey, Nic Carter, and the Digital Currency Group to draft up a rebuttal and pick apart the arguments put forth by Congress.  https://platform.twitter.com/embed/Tweet.html?dnt=false&embedId=twitter-widget-0&features=eyJ0ZndfZXhwZXJpbWVudHNfY29va2llX2V4cGlyYXRpb24iOnsiYnVja2V0IjoxMjA5NjAwLCJ2ZXJzaW9uIjpudWxsfSwidGZ3X3NlbnNpdGl2ZV9tZWRpYV9pbnRlcnN0aXRpYWxfMTM5NjMiOnsiYnVja2V0IjoiaW50ZXJzdGl0aWFsIiwidmVyc2lvbiI6bnVsbH19&frame=false&hideCard=false&hideThread=false&id=1521106193997086721&lang=en&origin=https%3A%2F%2Fwww.bsc.news%2Fpost%2Fdebunking-the-environmental-fud&sessionId=d11a44fc7e45bbec5b00bef6845ed5c188e66f68&theme=light&widgetsVersion=c8fe9736dd6fb%3A1649830956492&width=550px

The Rebuttal

In total, there are eight separate rebuttals to claims made by Congress; however, for the sake of focus, below are the key standouts: 

Claim: Mining facilities across the United States pollute communities and produce significant greenhouse gas emissions. 

Rebuttal: The response notes to differentiate between data centers and power generation facilities. While data centers will host miners, they are essentially no different from the data centers operated by major tech companies like Amazon, Apple, Google, Meta, and Microsoft. Data centers use electricity generated externally from power generation sources, and electricity is purchased from the grid to support the facility’s operation. 

Digital farming services do not emit CO2 as they are not industrial facilities. Furthermore, the hardware devices used in the mining farms are the same as those used by animation studios, film studios, financial service companies, and medical companies. Thus, the specific hardware device is tied to multiple use cases. Therefore, any claims that these devices are harmful would mean that all the aforementioned industries are equally engaged in environmental degradation.

Claim: Concerted efforts are ongoing to re-open closed gas and coal facilities to power the mining industry. ‍

Rebuttal: Members of Congress have chosen to base their claim on a handful of mining operations that comprise less than 2% of the entire Bitcoin network. Furthermore, most digital asset miners are moving away from fossil fuel-based electricity and targeting renewable energy sources. 

Using a case study like Marathon Digital Holdings, which is among the largest public miners in the United States, they have declared their intention to migrate to a sustainable model by year-end 2022. In addition, a number of other mining corporations have indicated their desire to migrate to sustainable energy, including Argo Blockchain, Bitfarms, Bit Digital, Cleanspark, Core Scientific, Iris Energy, Galaxy Digital, and Terawulf, among others. 

Claim: A single Bitcoin transaction could provide enough energy to power an average U.S. household for a month. ‍

Rebuttal: This is categorically false and relatively simple to prove. Firstly, Bitcoin transactions do not carry “energy payloads” and cannot be redeemed for energy per se. A Bitcoin transaction generates no more energy than a search on Google, a tweet on Twitter, or a post on Facebook. 

Based on the number of daily transactions, that would mean that bitcoin transactions consume a significant portion of U.S. energy daily. Therefore, it makes little logical sense to associate mass energy consumption with Bitcoin transactions on such a large scale.

Claim: Proof-of-Stake (PoS) offers less energy-intensive alternatives to Proof-of-Work (PoW) when validating transactions.

Rebuttal: While there is some validity to this claim, it should be noted that PoS is not a mining technology but rather a technique to determine authority over a distributed ledger. With that being said, it does not achieve decentralized distribution, which is a core pillar of Bitcoin.

Secondly, PoS and PoW do not achieve the same outcome: “A bicycle uses less energy than a plane, but it achieves something different, and so cannot be considered more efficient.”

Claim: Besides generating greenhouse gas emissions, PoW mining uses large-scale servers that produce an immense amount of electronic waste. The lifespan of the hardware used in these mining farms quickly becomes obsolete and reportedly has 30,700 tons of electronic waste per annum. 

Rebuttal: The letter from Congress bases this claim on a single academic citation of work that assumes that the life cycle of these ASIC devices is only 1.3 years. Aside from the absurdly short timeframe provided, there does not appear to be any hard evidence to support the amount of waste generated. Furthermore, ASICs that are older than seven years are still tradable on secondary marketplaces since they still hold value to average consumers and gamers.

The complete list of claims and rebuttals can be found here for reference. 

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Quick Stats

The following statistics are pulled directly from the Bitcoin Mining Council rebuttal:

According to the Bitcoin Mining Council’s latest Q1 survey of miners, which consists of a bottom-up analysis of 50% of the current hash rate, Bitcoin miners used 64.6% of sustainable energy (defined as wind, solar, hydro, or nuclear). 

In the last year, s9s (Miners), now over six years old, have accounted for 40% of the hash rate. 

‍Source : bsc.news