Why the energy FUD might not be so bad after all

I’m going to preface this by saying that the energy FUD seems too extreme to me. I started digging into energy usage globally and was pretty shocked to find that something like 30-60% of energy is wasted due to grid inefficiencies, poor building insulation, using energy when offices are empty, using inefficient bulbs etc.

When you compare that to the 0.1-0.15% of energy used globally for Bitcoin, which sustains the network of the number 1 cryptocurrency in the world, the energy FUD seems overblown.

However, whilst reflecting earlier today I started to think about how this might pan out. Here’s what I came up with:

Bitcoin mining is like any business and ultimately it’s about generating maximum profits.

Bitcoin mining only remains profitable and/or becomes more profitable as long as Bitcoin’s price stays high or increases.

We live in a world now where whether we like it or not, being climate conscious is important to businesses, governments and individuals. ESG is an evolving part of business and investments and will only become more important.

As much as it pains me to admit it, Bitcoin’s market cap will be somewhat limited by how green it is. Only so many individuals, businesses, wealth funds etc. will store it and transact in it whilst a question mark remains over its green credentials.

Based on all the above and seeing how market trends have played out in ESG, leads me to believe that miners will continually strive to be greener in their operations. As a miner, not only will you will be able to more easily seek capital/investment to begin/expand operations if you can demonstrate a willingness to be green, but you also contribute towards a greener mining network, which in aggregate serves to boost the price of Bitcoin and hence potential for future profits.

It’s true that there will always be some non-green players, and this can’t be stopped per say in a decentralised system with a fungible coin, but I believe the incentives will be heavily weighted as such that those who are more climate conscious, are able to outnumber and even ‘make up’ for those miners that don’t use renewable energy, by for example carbon offsetting.

I feel like the energy FUD is an open invite for Bitcoin miners to become greener and in doing so, further boost their future rewards. It almost felt like (on reflection, I was annoyed at first) a certain billionaire’s comments were a way of throwing down the gauntlet, and I think the Bitcoin network will embrace the challenge.