Gold, fiat, banking, and Bitcoin: the day of reckoning cometh

The “ridiculously wasteful, malignant, guzzling” of electricity by Bitcoin miners is “illegally siphoning power, causing countrywide blackouts, not remotely sustainable, and is ruining the planet.”

“By July 2019, the bitcoin network will require more electricity than the entire United States currently uses. By February 2020, it will use as much electricity as the entire world does today.”—

OMFG run for your lives, Bitcoin will kill us all! But wait, before we all go running for the nearest fallout shelter, let’s just for a minute examine if there’s any truth behind any of these claims. Will Bitcoin really boil the oceans? Unsurprisingly, upon conducting a most basic investigation of the above headlines, the majority turn out to be nothing more than specious defamation, propagated by click-baiters (at best), fear-mongers (at large), and outright liars (at worst; yes Eric Holthaus I’m calling you out).

That being said, a few of these articles do cite some apparently legitimate statistics, regarding the energy consumption of Bitcoin miners: e.g. “Bitcoin [is] about 5,033 times more energy intensive, per transaction, than VISA, at current usage levels,” “each bitcoin transaction requires the same amount of energy used to power nine homes in the U.S. for one day,” and “bitcoin mining now consuming more electricity than 159 countries including Ireland and most countries in Africa.”

While the assumptions of some of these statistics are certainly more sound than others, a few of the stats do seem to be backed by reliable data and calculations and must be taken seriously. An honest accounting of the environmental impacts that all facets of our modern civilization has on the biosphere is this generation’s most pressing concern, next to taking action to mitigate those negative impacts. In order to create a sustainable future for our planet, it’s absolutely vital that we stop paying attention to only economic bottom lines, but instead hold all socioeconomic entities to positive triple bottom lines. The triple bottom lines are environmental, social, and economic. If humanity is to survive on this planet for much longer, we must strictly insist all our human institutions maintain positive economic, social, and environmental bottom lines. The first step in accomplishing this is to make transparent all facets relevant to our institutions. One of the most important tools we can implement in this process is Life Cycle Analysis (LCA).

LCAs require much deeper and far reaching analysis than is required by existing systems of financial accounting, where the primary concern is the potential financial gain of share holders, above all else. In addition to such accounting systems’ narrow and naive focus on share holders’ profits, a triple bottom line LCA must include all global environmental, social, and economic impacts across the entire life-cycle of the subject of the LCA. For example, the environmental and socioeconomic portions of an LCA for some product may include (but is not limited to) the following concerns:

  • energy, material, and living inputs and energy, material, and living outputs involved throughout the product’s entire life-cycle
    • e.g. mining of raw materials, transportation, refining, manufacturing, point of sale, usable lifetime, recycling, disposal of waste products, etc.
  • physical, mental, and social impact on the wellbeing of all life forms impacted by the product over it’s entire life-cycle
    • e.g. plants, animals, locals, producers, manufacturers, sellers, consumers, recyclers, disposers, and any third parties

Going to the effort of carefully, honestly, transparently, and inclusively creating such LCAs is hard, but it’s importance increases in step with our increasing power to affect the Earth’s chemical, geological, biological, and social systems.

Unfortunately, I currently lack the resources to undertake such a comprehensive triple bottom line LCA for the Bitcoin mining industry. But after some fairly lengthy searching, I did finally come across a fairly detailed series of analysis written by Hass McCook and published on CoinDesk in 2014. I highly recommend reading through this five part series if you are interested in a comprehensive comparison of Bitcoin mining to the existing gold productionfiat minting, and banking industries. Otherwise, here are Hass McCook’s compiled data tables for his triple bottom line comparisons of the industries:

Additionally, here is the tl;dr version of other relevant information I came across during my own research:

Note: I’ve omitted gold production, because despite its usefulness as a benchmark, it is not as directly competitive with Bitcoin as are the fiat currency and banking systems.

Fiat Minting


Bitcoin Mining

“Now Bitcoin is an environmental subsidy to alternative energy all around the world because it’s causing these projects to be amortized over a year instead of five. Oh you’re telling me we were running a green coin all this time and I didn’t even notice!?…The decentralization of Bitcoin is driving the decentralization of energy production, which is one of the most important trends in human history…The level of security that we have for Bitcoin today is a level of security that can handle global attacks by colluding nation states: thats the level of security that is needed for this system to remain censorship resistant. But if the system was 10x bigger with 10x more users, it doesn’t need 10x more mining. It already has globally secure mining: what we have is enough. There’s a profit motive that drives it. But it’s a mistake to think that if we go global that cost will multiply; quite the opposite, in fact. Over time the reward for mining decreases, and as a result, it’s more likely that we’ll see that gradually taper off and plateau.”—Andreas Antonopoulos

Provided the overwhelming evidence above, it should be abundantly clear that Bitcoin’s triple bottom lines are in a class all their own when compared against the tremendously inefficient, costly, bloated, dirty, corrupt, thieving, criminal, and all-too-often blood-soaked legacy institutions of gold, fiat, and banking. In accordance with its founding principles, Bitcoin will sweep aside the curtains, open wide the gates, shine a light in the dark, and drive the money-changers from the temple! The day of reckoning cometh…

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