We have been in Bitcoin space for quite some time to notice same things happen all over again. Starting from “Bitcoin is backed by nothing”, “Bitcoin is a pyramid scheme”, “Bitcoin is a bubble” to finally now “Bitcoin damages the environment”. All this is done with one single purpose to deface the Bitcoin and give space to some existing or new-born crypto.
Bitcoin vs Crypto
If you look back in to all those new possibilities which “advance” crypto brought to the community, you will be surprised. All those wonderful technological breakthroughs – decentralized finance (DeFi), ICO, IDO, NFT and even so called “stable coins” (google “UST collapse“) brought nothing but huge losses for retail investors and millions of easy money for con artists. And they were advertised as a solution to make investments affordable.
Bitcoin does not have all those loud statements. It serves one purpose – peer-to-peer electronic way of payment which does not require third-party. No one can prohibit you from sending a Bitcoin payment, no one can prohibit you to receive such a payment and no one can stop that payments and any one can use this system as long as connected to the Internet. Try to read our other articles on what is Bitcoin and how it works to have a better understanding of subject.
POW vs POS
POW stands for “proof-of-work”. This is a process of confirming a transaction in the Bitcoin network. We will not go very technical now. One thing you need to know is that your transaction is confirmed by some random miner who was lucky enough to guess a solution to some mathematical problem. There millions miners worldwide who runs special equipment to solve such mathematical problems, confirm transactions and earn Bitcoin rewards. What is most important here is that if some miners go offline, you transaction will be confirmed by some other miners. It can take more time, but it will happen for sure.
Now POS stands for “proof-of-stake”. And transactions are confirmed not by miners, but by holders of a particular crypto. If you read carefully, a question may arise now in your head? What if some big holder decides to decline some transaction? This will require that holder to have more than 51% of coins to be able to solely decline transactions. But what if some big holders are ORDERED to decline some transactions? In the current world its not a big deal to find the identities of top holders of let’s say Ethereum and order them to prohibit transactions with some parties or wallets. This is huge blow for decentralization and a step forward censorship.
“Proof-of-work” damages environment?
OK, now let’s get back to the new myth of 2021-2022. Bitcoin damages environment with big CO2 emission from mining. Here are few facts:
- Bitcoin mining CO2 emission is ~22 million metric tons;
- Global CO2 emission is 36 billion metric tons [source];
- 18 largest U.S. banks are responsible for financing 1.98 billion tons of CO2 emission [source].
Considering these facts alone we can say that Bitcoin is much more efficient than the global banking sector. One more fact for you, there are are 3 millions ATMs worldwide and each ATM is responsible for 1 metric ton of CO2 per year, making it total of 3 million metric tons.
Yes, CO2 emission takes place in Bitcoin mining. But miners are forced by the nature of Bitcoin itself to find more efficient sources of energy. According to recent reports, green energy (solar, hydro, wind) powers about 50% of bitcoin mining facilities.
There are many more sources of CO2 in the world which brings little value for the huge cost. Only YouTube emitted 11 million mtons in 2016. And it was before COVID. Single private jet emits 2 tons per flight hour. In the same time Bitcoin brings the financial revolution to the world. It’s like measuring the CO2 emission of the Internet. Bitcoin is still in the early stages of adoption and the true values of it are yet to come. In our opinion, its more useful to have an option to send permissionless, borderless payments than watching some funny YouTube videos. Growing emission of CO2 can not be ignored, but should be addressed with technology and not denial of other technological advances.