In my article “Green energy and Bitcoin” I argue that the mainstream concerns about Bitcoins environmental impact are basically misconceptions about the technology’s fundamental principles. Inflating currencies incentivize frivolous spending, Bitcoin does not. In addition to this the article gives examples on how Bitcoin mining can be used as a meta-means of storing surplus electricity. Recent developments in the Bitcoin space has revealed that there’s a lot more to the story than this.
The Bitcoin protocol, as it is, can handle about seven transactions per second. The amount of hashing power currently securing these seven transactions is simply breathtaking. Some estimates claim that it amounts to more than the entire energy consumption of Ireland. Even to the most enthusiastic proponents of Bitcoin (yes, that includes yours truly) this can seem like a colossal waste. What we’ve built is a beyond Fort Knox level security infrastructure around just a few virtual gold bars. Why? Why is this necessary? For base-layer transactions it’s not. But now we have the lightning network. An emerging technology built on top of the Bitcoin protocol that vastly increases its transaction capacity.
Security had to come first. Without a completely secure, tamper proof, fully decentralized base layer there wouldn’t be anything to build lighting on. Bitcoin is more than programmable money, it’s programmable trust. Its super secure foundation is a big part of what makes it so special. This is not the end of the story but the beginning. The lightning network is the first big layer 2 solution but there will be more. Once you realize Bitcoin’s potential you also realize why it was constructed the way it was, why it was so successful and why opinions about it are mostly futile. For an opinion about Bitcoin to have any impact at all it needs to be an opinion that at least 95% of its users hold. So if Bitcoins energy consumption concerns you, stop complaining and do something that actually helps about it. Adopt SegWit, run a lightning node, build something. Bitcoin cares as little about your opinion as the atmosphere does about politics.
Yet another point is that miners tend to choose countries with a high percentage of green energy for their operations. This is not a coincidence. Green energy is getting cheaper and cheaper even without subsidies and miners need to plan ahead. Furthermore green energy alternatives provide independence in a way that fossil fuels never could. A mining farm in a cold country with a lot of wind and sunlight could be a completely self-sustaining money machine one day. Once the servers are on, the turbines are up and running and the solar panels are in place you could just flip a switch and leave it running by itself. A program could start or stop servers depending on energy delivered. A means of converting sunlight and wind into money directly has been invented. We’re on the brink of many revolutions simultaneously but the green energy one is perhaps the most important one. Clichés and politics will not save the earth but technical solutions will. Green energy needs to be economically viable. That’s the threshold. That’s what we should aim for. Bitcoin will play a role in this and only time will tell what this role will be. Time, by the way, is money.