Bitcoin mining uses less than 0.1% of global energy, explains Lyn Alden

Key facts

:

  • The Bitcoin network uses less energy than Google, YouTube or Facebook.

  • For the analyst, the media sensationalize reports because of their lack of knowledge about Bitcoin.

Analyst and financial strategist, Lyn Alden, takes a new step forward against Bitcoin critics, presenting a report in which she estimates that cryptocurrency mining uses less than 0.1% of global energy

For Lyn, who is also an electrical engineer, this figure means that Bitcoin’s energy expenditure is not as high as people think, so it does not represent any global problem

.

She also points out that – in her opinion – by design the blockchain “cannot use more energy than the utility it provides to users”, who number around 100 million people.

In the report published this week on his blog Alden determines the percentage of expenditure based on the same data

presented by the University of Cambridge, which have also been used to criticize the energy expenditure of the network.

Researchers at the English think tank calculate the maximum annualized rate of Bitcoin spending at less than 95 TWh, according to data seen at the time of this writing.

Given that the world uses more than 170,000 TWh of energy per year, that means that the entire Bitcoin network, at its estimated peak consumption level, uses less than 0.1% of the world’s energy consumption. That’s for a network with over 100 million estimated users.

Lyn Alden, analyst and financial strategist.

The percentage of global energy consumption of the blockchain, estimated by the analyst, does not differ much from the calculations presented by some other figures and firms within the ecosystem.

In this regard, Nic Carter, co-founder and Chairman of the Board of Coin Metrics recently stated

that miners annually use about 0.26% of the world’s electricity, and 0.11% of the world’s energy production. Bitcoin mining uses less than 0.1% of global energy, explains Lyn Alden Bitcoin mining uses less than 0.1% of global energy, explains Lyn Alden Bitcoin’s energy consumption is negligible in relation to global energy consumption. Source: Lyn Alden’s blog.

Even Cambridge University itself noted in 2019 that Bitcoin accounted for only 0.27% of the planet’s electricity consumption. CryptoNews also reported Galaxy Digital’s statements, which point out that banks and gold production systems <a href=”https://www.criptonoticias.com/comunidad/bancos-produccion-oro-con

add-double-energy-bitcoin-galaxy-digital/” target=”_blank” rel=”noopener”>consume twice as much energy

as Bitcoin.

However, whatever the level of Bitcoin’s electricity consumption, Lyn believes that this is an absolutely necessary expense that results in greater security. This is because the more energy the blockchain uses, the more secure it is against most different types of attacks.

Many small non-Bitcoin blockchains have fallen victim to 51% attacks, where a single entity gains temporary or permanent control of more than 51% of the processing power in the network, and uses that majority of the processing power to reorganize blocks and perform double-spending transactions.

The benefits of Bitcoin outweigh the energy cost

Taking into account the security gained by the network thanks to its energy consumption, Alden also evaluates the incidences of this expense. This, based on the growth of Bitcoin and the benefits that its use would bring in the longer term.

He thinks that, if the network is successful and exceeds 100 million users (doubling or tripling its current market capitalization), energy consumption should only reach several tenths over 1% of global energy use. Conversely, if the network does not grow much from current levels, its energy use will stagnate and fall to almost 0%.

Thus, for Alden, Bitcoin’s energy consumption will never exceed its long-term utility (no matter how high or low that utility ends up being).

He also mentions the comparison that has been used as a benchmark to question the blockchain

‘s energy expenditure, according to which Bitcoin uses more energy than some countries.

“That’s true,” Lyn says, “but so does Google, YouTube, Netflix, Facebook, Amazon, the cruise industry, Christmas lights, home dryers, private jets, the zinc industry, and basically every other sizable platform or industry.”

Sensationalist campaign and Bitcoin ignorance

Throughout

her article, the analyst counters the opinion matrix that Bitcoin uses too much energy, does not use it efficiently, or can even cause a climate disaster, as is believed in extreme cases

.

Lyn counters these ideas by pointing out that all the criticisms are part of a sensationalist media campaign, which exploits the ignorance of both the public and many journalists.

He shows cases of apocalyptic news stories predicting that Bitcoin’s energy consumption will kill the planet’s energy.

In the graphic below, for example, you see a screenshot of a publication in the newspaper Tech & Science, which in November 2017 announced that “Bitcoin would consume all the world’s energy by 2020.” Something that “well, here in 2021, we obviously know didn’t happen,” Lyn comments.

Bitcoin mining uses less than 0.1% of global energy, explains Lyn Alden <img width=”700″ height=”385″ src=”https://yellowrocketagency.com/wp-content/uploads/2021/08/media-de-comunicacion..png” alt=” /> Many media outlets have published apocalyptic messages about Bitcoin’s energy costs. Source: Lyn Alden’s blog.

Alden adds in her writing that, despite Bitcoin’s energy use being almost irrelevant globally, such miscalculations are still being published in the media. “How can journalists make such huge mistakes?” he asks.

The answer, according to Lyn, is that it often comes down to people not understanding the growth process the network is going through, and it’s easier to “sensationalize” things for page views or political gain.

In that sense, he says Bitcoin is not trying to be the cheapest payment network, “although in many contexts it can be,” but it is trying to be a payment network with a decentralized asset that makes it easy for people to exchange money peer-to-peer, without escrow, without censorship, and without geographic boundaries. “And for 13 years it has succeeded.”

From an engineering perspective, Bitcoin’s energy usage isn’t a problem when it actually runs the numbers, but you need to understand how it works to calculate it correctly and understand what the trade-offs are if you use a different approach to Bitcoin’s uses.

Lyn Alden, analyst and financial strategist.