TWEETSTORM is an occasional feature on decentralize.today where we share threads, mostly from Twitter, that we think deserve a wider audience, some are informative, some educational, some amusing and others yet are controversial...we dig these out for you so you don't have to!
Almost all attacks on Bitcoin energy usage stem from one simple failure of human reasoning:
More consumption of energy = bad
Less consumption = good
Like most things, the truth is more nuanced than this.
Here's how it really works...
First, some context to reassure you I'm not trying to dupe you with false logic or greenwash
When it comes to generation of power, would we say More generation of energy = bad Less generation = good?
I think we'd agree "Hang on mate. It depends on the type of generation."
And you'd be correct to say that.
Similarly, is it not possible that the type of consumer matters to whether it is "bad" or "good?"
Should we not at least entertain this possibility, even grudgingly, in case we reach too hasty a conclusion?
OK, you're still here. Thanks for keeping an open mind. Here's 3 things I'd like you to consider
1. For a renewable revolution to occur, the grid needs to generate 3x more power.
This is documented in Saul Griffith's book "Electrify Everything". This requires 3x the power demand
2. Introducing "Demand response": this is grid-jargon which means "a consumer who can flexibly respond to grid need by changing their demand"
The IEA (International Energy Association) states that to meet Net Zero Emission targets, we need to 10x our "demand response" by 2030
Examples of consumers who can do this include
- Steel plants (for <3 hours until steel starts to harden)
- EV owners (as long as they "play nice" and charge their cars offpeak
- Bitcoin mining (as long as they play nice and respond to grid operators requests to curtail)
Pumped hydro is a great option in some locations
Justin Orkney, a Lead Analyst at Duke recently explained on a podcast with Troy Cross "What you want as a grid owner is fewer customers who have no flexibility, who will cause additional infrastructure expense to accommodate...
...but more customers who are flexible, who cooperate with grid owners to help keep the grid stable, and who won't cause you to have to upgrade the grid to cope with the way they use energy." (Because they use it at times or in places that mean more grid infrastructure is needed)
So how are Bitcoin miners doing as a flexible demand response customer?
Well, let's look at two recent times when grid stability was tested.
Winter Storms in Texas ---> Bitcoin Miners shut off
Summer peak demand in Texas ---> BTC miners shut off
So far they are doing well.
It is not disputed by energy engineers, climate scientists or renewable operators that we need to electrify everything + increasing demand response by 10x to meet the challenges of the renewable transition
The only ones who dispute this are those who dispute climate change
So is it really such desperate, psychopathic, self-interested, disingenuous, insane greenwash to suggest that we should evaluate whether Bitcoin mining could be one type of demand response customers that would help to assist with the transition to the renewable grid?
So in summary, I'd suggest we shift our thinking:
"More carbon-neutral energy generation is good" + "More highly flexible consumers of energy who support the renewable build out and play nice with other consumers = good"
It's still not a perfect formula. But less imperfect.
Bitcoin has potential to be this sort of demand response consumer because it uses a very energy-intensive algorithm called "Proof of Work".