The Campaign Against Reality
Mr. Heinäluoma’s great proposal is to “block the usage of the underlying technology” of Bitcoin, which translates to prohibiting proof-of-work transactions. This erroneous attitude is, of course, followed by a demand for cryptocurrencies to go to a proof-of-stake consensus to be more “climate-friendly.” Regardless of how many times we state that proof-of-work is the fundamental innovation of Bitcoin, guaranteeing a neutral and predictable monetary policy, which is severely missing in today’s fiat-infested world, does it make a difference? If people like Mr. Heinäluoma, crusaders for state action, go to work, facts are thrown out the window. They must sell a compelling narrative that is visually appealing. As for bitcoin mining, as usual, the report is that it is detrimental to the environment and that someone should prevent it, which means that the government should prohibit it. The excellent news for Bitcoiners is that they have the evidence on their side. Bitcoin Mining Council (BMC) chairman Michael Saylor recently released its Q2 Global Bitcoin Mining Data Review, which revealed some interesting discoveries about bitcoin mining. The statistic above represents about 56 percent of the total sustainable energy use for the whole bitcoin mining network. Previous estimates of the percentage of renewable/sustainable energy used in bitcoin mining vary from 39 percent (according to a University of Cambridge research) to 73 percent (according to another study) (Coin Shares study). Overall, a share of around 50% in sustainable energy appears feasible, especially when we consider the incentives at play: miners are naturally motivated to find the cheapest source of energy, which is often otherwise unused renewable energy (hydro, solar, wind during peak hours) or so-called stranded energy, such as natural gas flared from oil rigs. Official Eurostat energy data show that the European Union uses 15% renewable energy and 13% nuclear energy for 28% renewable energy production. It is much less than Bitcoin’s lower-bound forecast of 39 percent in renewables (excluding nuclear) and less than half of the BMC’s projection of 56 percent in renewable energy (including nuclear).
It Is Time to Put Frankenstein’s Monster to Rest
Marty Bent, a podcaster and author, reminds us that no renewable/sustainable energy ratio will satisfy the ruling elite. Although bitcoin could be mined entirely using hydroelectric, solar, gas flares, and volcanic energy, it would still be condemned to waste resources since it consumes so much power. It is not a matter of energy numbers but rather a question of legitimacy as viewed by the public. To portray bitcoin as worthless and dangerous, politicians and other fiat maximalists will use any story that serves their purposes, whether it is about energy waste, terrorism funding, drug trafficking, malware, inequality or any other kind of fear-mongering.
No Competition in Fiat Currency
It allows for the efficient use of otherwise wasted energy sources and the potential to stabilize the network through the occasional overproduction of energy as bitcoin mining does—renewable sources of energy, As has been argued many times throughout the years. The true purpose behind this is more pragmatic: to defend one’s area against intruders. The state’s monopoly on money is sacrosanct and must be maintained at all costs, mainly when the form cannot protect itself. Check out the remarks on any recent tweet from the International Financial Institutions, Bank for Banking Supervision, Treasury Department, or Eurogroup; you will be hard pushed to find a single favorable response. Financial institutions are already fighting the battle of ideas. In the short term, attempts to damage Bitcoin’s image by raising bogus environmental problems may serve as a diversion from the fundamental issues facing the euro.
