Revisiting Bitcoin’s Energy ‘Problem’ in the Face of ESG Investment Mandates

Critics of Bitcoin’s energy use should consider its relative carbon density rather than the absolute amount of energy used.

I get really animated when discussing Bitcoin’s energy use. And by “Bitcoin’s energy use,” I mean the amount of energy bitcoin mining uses. I tend to say Bitcoin’s energy use isn’t a problem and that we should instead focus on Bitcoin’s emissions. [Note: we capitalize the blockchain (Bitcoin) and use lowercase or trading symbols (bitcoin/BTC) for the asset.]

Before diving into any details, it’s important to make clear what bitcoin (BTC) mining is and why it needs to use a lot of energy. Mining is the mechanism that sustains the financial infrastructure of the Bitcoin network and it is energy intensive by design to provide ironclad security.

The comparison game

In a casual setting, my favorite way to showcase that Bitcoin’s energy use “doesn’t matter” is to append Bitcoin’s energy use to the U.S.’s energy consumption and ask if it looks like Bitcoin is using too much energy (see below).

Bitcoin energy consumption vs U.S. (University of Cambridge Centre for Alternative Finance)

Read this article on CoinDesk

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