Crypto

“The transition from bitcoin mining to green energy is an economic necessity”

When it comes to the environment, bitcoin rarely gets good press. More and more studies denounce its high societal cost due to mining activities, the energy-intensive process of verifying transactions through computer calculations. This week, a study published in the journal Scientific Reports again points to the detrimental effects associated with the development of the most famous cryptocurrency. According to her, bitcoin mining will be similar to the production of meat, which, as we know, is responsible for a large part of greenhouse gases on a global scale. For L’Express, Sébastien Goospiyou, CEO of BigBlock Datacenter, goes back to the mistakes made in this kind of impact study and, on the contrary, insists that miners switch to green energy for economic reasons.

L’Express: According to a study published in Scientific Reports, each bitcoin produced in 2021 generated a social cost of $11,314 (and a total of $12 billion since 2016). For one dollar of Bitcoin created, the damage will be 35 cents. The ratio is comparable to beef production (33%). This will not fix the image of this cryptocurrency.

SG: Unfortunately, this is not a surprise. Published a few years ago by the University of Cambridge, a paper on bitcoin energy consumption continues to serve as a benchmark. However, they are bound to contain errors because we cannot know exactly where the mining machines are located. To be able to geolocate, you need to get their IP addresses. But the ones the researchers extract for their calculations are declarative: the minors put that information into “pools” that then pass it on to institutions like the University of Cambridge. Also, the collected IP addresses do not necessarily correspond to the locations where the machines are running. In some regions, such as North America, the data is undoubtedly more reliable than in other countries where miners are in trouble with the government. Currently, no study can determine whether mining is coal or green energy, even if, from what I see on the ground, this second option wins without a doubt.

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Has your mining company already switched to clean energy?

Yes. And this is also an economic necessity, given the rise in the price of hydrocarbons. Miners who insist on using this kind of energy are sure to go broke. Some players are already forced to sell their cars, no longer controlling costs. Now most of the production of BigBlock Datacenter is located in the Congo. Nothing predetermined us to settle there. But our interests coincided with the interests of the country. To mitigate deforestation and try to protect the region’s last remaining mountain gorillas, the Virunga alliance, led by Prince Emmanuel de Merode, decided several years ago to build some hydroelectric power plants. However, due to Covid and violence in the region, electrification projects have been seriously disrupted. The new plant was to be put into operation with very few customers. So, we have connected one of our containers with mining machines inside. Initially, we took only a small part of the production capacity. Now we have about 30%. This example shows how useful mining can be without any noticeable environmental impact.

Some may criticize you for using energy that could be useful for projects close to citizens.

On the contrary, we use cheap electricity that no one needs. If the demand in the network increases, we are ready to disconnect ourselves and look for another source of energy without financial compensation. This is part of the contract. In fact, mining operations allow not only to bring money, but also to participate in the balance of the network. And this model is in the process of imposing itself. In Texas (USA), mining really serves as an economic battery for electricity producers. As soon as there is a big demand, they go offline and even get compensated for it!

However, American miners use gas a lot. So they haven’t made their green revolution yet…

This is true. But it would be enough to introduce rules for them to change their habits. Instead of considering banning this profession, which is completely arbitrary, we could decide that mining can no longer be based on coal, gas or oil. This will not harm the security of the Bitcoin network in any way. In fact, this is perhaps the only industry on a global scale that can be forced to completely abandon hydrocarbons without compromising its work. What cannot be said, for example, about banks.

No matter what, does the energy-intensive “proof of work” (PoW) system that mining is based on compare to other solutions such as the “proof of stake” (PoS) recently implemented by the Ethereum network?

You cannot stop mining all over the world. Moreover, consider this a mistake, since the benefit/risk ratio of the bitcoin system is largely positive. It is clear that mining brings money and contributes to the balance of electricity networks in countries that need it. It should also be remembered that the bitcoin system must provide financial inclusion for the 1.7 billion adults who are unbanked due to lack of resources or civil status issues. Finally, in a world where so many currencies have stalled, bitcoin as the monetary standard is becoming an increasingly credible hypothesis. Bitcoin enabled Ethereum, which then developed decentralized finance, and this requires PoS. But this passage is not relevant for Bitcoin. Just like gold is heavy because of its atoms, bitcoin tokens are heavy because of the electricity that mined them.

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