Nick Carter, co-founder of Coin Metrics, denies claims that Bitcoin mining could cause an environmental disaster due to high energy consumption.
Bloomberg journalist Noah Smith posted on March 24
article titled “Bitcoin miners on the road to self-destruction.” In it, Smith argues that the rise in the bitcoin rate will lead to even more electricity consumption. In addition, cryptocurrency mining consumes local energy resources, depriving residents of electricity.
Digiconomist founder Alex de Vries also believes that further growth in bitcoin could lead to the fact that in the future the network will consume as much energy as all data centers around the world. As a result, “the carbon footprint in the atmosphere from mining will grow to the size of London.”
However, the Coin Metrics co-founder denied these claims and came out in defense of Bitcoin. Carter said that in this case, Bitcoin is no different from gold, for the extraction of which huge resources are also spent. As for Bitcoin, mining is done primarily in areas with excess energy. For example, the Chinese provinces of Xinjiang, Sichuan, Inner Mongolia and Yunnan are some of the largest cryptocurrency mining regions. From Q4 2019 to Q2 2020, these provinces collectively accounted for 63% of the global hashrate of the Bitcoin network. Bitcoin miners in these provinces use solar and wind power, as well as surplus energy from hydroelectric power plants, especially during the rainy season.
In recent years, China’s surplus renewable energy has averaged 100 TWh. According to Digiconomist and the University of Cambridge, Bitcoin mining consumes between 89 and 138 TWh per year. Therefore, it is enough for miners to “settle in the right places” with cheap electricity.
Smith argues that Bitcoin developers need to find an alternative to the Proof-of-Work (PoW) consensus method, and suggested that they move to Proof-of-Stake (PoS). Smith called this algorithm “more viable” as the Ethereum 2.0 update will also use Proof-of-Stake to cut power consumption by 99.98%. However, Carter is not convinced that PoS can compete with PoW in terms of security and decentralization. Carter thinks this is reminiscent of the idea of a perpetual motion machine, where the grid can operate without consuming electricity, and users will receive the same guarantees.
Last week, mining company Argo Blockchain announced that it will launch the first sustainable Bitcoin mining pool that will only use energy from hydroelectric power plants.

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