Amy, who wields a Sharp Little Pencil, writes:
Roger, I’m sorry I didn’t capture the link for this. Wondering what your thoughts are concerning Bitcoin in general, as well as the issue of resources used? (You said I can ask you anything!)
According to the Bitcoin Energy Consumption Index, a tracker created by Digiconomist — a platform that monitors “unintended consequences of digital trends” — executing a single Bitcoin transaction requires the same amount of energy that the average U.S. home consumes over a three-week period. That same single transaction has a carbon footprint that is the equivalent of watching more than 50,000 hours of YouTube.
A lot of layers here. First off, I’d be lying if I said I fully understand Bitcoin. Then again, I don’t really recognize the real implications of abandoning the gold standard 90 years ago either, though I know people who do. But Bitcoin is far more legitimate than it was even a decade ago.
Yes, I “get” the basic premise of Bitcoin, but it’s way too volatile for my taste. The very day you wrote me, January 25, I found this article. “Bitcoin’s dead-cat bounce? Here are the signs that may indicate price bottoms, analysts say.”
Or this one. “Bitcoin claws back from crypto crash, but one bear case sees $14K as a next stop.” Not to mention, this: “Cathie Wood’s Ark Invest Predicts Bitcoin Could Exceed $1M by 2030.” Sounds like a lot of spitballing, but what do I know? Not much, as I said.
I had heard about the energy/carbon footprint problem of Bitcoin broadly. But the article Amy linked to really breaks it down. 1,449,125 “VISA transactions could be powered by the energy consumed for a single Bitcoin transaction on average (2153.84 kWh).” And as one subhead notes, “Limited scalability causes extreme transaction footprints.”
Is this fixable? If Bitcoin switched to a consensus algorithm, theoretically. “In proof-of-stake coin, owners create blocks rather than miners, thus not requiring power hungry machines that produce as many hashes per second as possible. ” And no, I have no real idea what that previous sentence is saying.
Speaking of energy use, there is a race to acquire lithium. Unfortunately, the process of mining is less than eco-friendly. It’s ironic. “As the world scrambles to replace fossil fuels with clean energy, the environmental impact of finding all the lithium required could become a major issue in its own right.”
For example, South America’s “Lithium Triangle, which covers parts of Argentina, Bolivia, and Chile, holds more than half the world’s supply of the metal beneath its otherworldly salt flats. It’s also one of the driest places on earth.” So it takes 500,000 gallons of water to produce a ton of lithium.
Thus there is a paradox of “clean” electric vehicles being powered by the “dirty” lithium mining business.
Thus, the technologies we use to make life better and easier may not either.