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Bitcoin energy consumption is bad but this is not the question

Just a heads up: This post will NOT provide a definitive answer, but will show you another perspective to think about.


Right now, like at least every other week, I read something about bitcoin or crypto in general being bad for the environment. But I think that this is not the correct view in this topic. The question is actually:

Is Bitcoin worth it?

Energy consumption is bad

Yes, consuming a lot of energy is always bad. And of course, if the bitcoin network would use a lot less energy, that would be great. But why does it have to use so much power?

Why all that power?

Without going into the technical details, the power is used in the mining process to figure out a cryptographic challenge which is being brute forced. And for that you need a lot of computing power.

But why is it designed in this way? Bitcoin is a Proof or Work blockchain. Meaning that providing a solution for that challenge was a piece of work which is rewarded with the ability to create a new block and get some BTC. And because getting BTC is lucrative, many network participants compete in finding the solution and at the same time monitor each other to find bad actors.

This mechanism makes the bitcoin blockchain secure and with more people competing by mining, the network gets even more secure.

Is Bitcoin worth the energy? And what is worth something?

Let's not get into the philosophical question whether BTC has value like gold or the USD does. For simplicity, let's assume BTC does have some sort of value like fiat money, maybe even more value as it will eventually not be subject to inflation and it does have some other properties.

Imagine some typical bank with a vault. This vault stores valuable items just like the bitcoin blockchain stores BTC. Is it worth it to build thick concrete walls and heavy metal doors to keep the vault safe from criminals?

Is it worth the gas if you drive in your giant SUV to the next McDonald's to get a milk shake and drive back home?

Is digging for gold and other precious metals worth destroying the environment?

Is eating lots of meat still an option when it is clearly linked to climate change?

Is wasting lots of energy worth having the tv on 24/7 and having lots of other devices in standby mode?

I guess most of us will definitely say that these few examples are not worth it and that something should be done here. But in the end, people (including myself) are wasting energy and resources all over the place.

But on the other hand, I pay for what I waste. I pay for the energy if I run my computer 24/7 without actually using it. If I pay for a whole chicken, only eat one leg, and throw the rest in the trash (this is actually super super horrible, DON'T fu*king do that!) is that not my business?

Well, yes and no. Yes you can do that, but we all know, you shouldn't. Just for the simple fact, that you are WASTING your money and resources and could get something productive or nice instead.

But again it is all up to your and other people's perspective. If you think, something is worth something, it is worth something to you and you are willing to pay for it in one way or another.

The value of crypto is not visible (yet)

I guess in the minds of most people, crypto is still just a synonym for scammy internet money that is used by criminals and degens. I would argue that if the crypto ecosystem can get rid of this bad reputation, people would focus less on the mass energy consumption or even accept it as a necessity for the value it brings.

If you think back a couple of years, people were concerned about data centers using large amounts of energy. However, today you barely read anything about that. Maybe because Google and friends try to build more efficient machines? Maybe because the cloud is so much "better"? And/Or maybe because consumers value the services these data centers seem to provide?

I think it is combination of all of that which showed data centers in a better light to the general public.

Crypto, on the other hand, still hasn't shown it's "real world" applications to ordinary people. There are of course real use cases, but only the minority of people did ever interact with dapps or blockchains (at least knowingly). Furthermore, the media keeps pressing hard on those climate and energy arguments.

There are plenty of revolutionary projects within the crypto ecosystem that could literally change the world for many of us. I think it is only a matter of time before one these breaks out of it's "niche" and finds broad adoption while changing the light on crypto.

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