One of the main talking points against Bitcoin used by the mainstream media, big banks and governments is that it consumes too much energy and therefore needs to be stopped/banned/changed. Bitcoin is being labeled as the black sheep and the source of countless problems related to climate, energy shortages, boiling oceans and what not. We are literally inundated with such reasoning from every major institution.

But most of those associated with the energy consumed are absolutely wrong, and in many ways Bitcoin even has a positive net effect on people, the planet and the power grid, and this positive effect will only increase over time.

The bitcoin-electricity connection comes from the way the bitcoin network works and the specific way in which new bitcoins appear, known as "mining". The so-called miners who participate in the process essentially record the transactions on the Bitcoin network, keep it running and protect it from manipulation. For this work, they receive a certain amount of new bitcoins, which are put into circulation in the form of a reward. Because this process can be economically profitable, Bitcoin mining has become a highly competitive industry and takes place almost all over the world, both by people in their homes and by huge companies that build dedicated infrastructure for the purpose.

This ensures that no single entity controls the Bitcoin network alone, making Bitcoin extremely resistant to any outside interference and attempts at manipulation or shutdown by any government, company or central authority.

By this measure, Bitcoin is the most secure network of computers in the world and the most decentralized cryptocurrency. The more participants join the network and the mining process, the more secure the network becomes.

Considering what Bitcoin really is and that through it every person in the world can have access to an uncorrupted monetary system and to digital money that can be sent anywhere in the world in minutes and that this money can make a difference in life to the billions of people who live in countries without the right to private property, freedom of speech, a functioning justice system, or a stable currency, it's easy to conclude that Bitcoin not only doesn't use much energy, but that even the amount of energy consumed doesn't really matter meaning. The positives of Bitcoin are too many.

But let's ignore for a moment what exactly Bitcoin offers to individuals and focus only on the energy consumed.

As an absolute value, Bitcoin does consume a large amount of energy, but this represents a very small percentage of the energy consumed by humanity as a whole. The predictions made by various organizations about the future of Bitcoin and the energy consumed by it are very manipulative and are intended to simply turn people away off it and are not based on any real scientific methods and models.

Such ridiculous predictions were made even by the World Economic Forum (WEF), which in 2017 predicted that in 2020 Bitcoin will consume more energy than all of humanity consumed in 2017.

Another past prediction is that by 2020 Bitcoin would have consumed all the energy on the planet.

Neither in 2020 nor in 2022 has Bitcoin consumed a significant amount of all electricity available, or that was produced.

According to the Cambridge Bitcoin Electricity Consumption Index, as of September 2022, Bitcoin consumes about 94.5 TWh of electricity per year. While this is indeed more than some countries consume, by comparison it is less than 0.5% of the total 22315 TWh of electricity being used worldwide at that time.

It is important to say that the electricity produced has always been more than that used by final consumers, the difference covering losses in the transmission of this energy and as a guarantee that at any moment the electricity network can take the necessary load. As of 2022, about 26730 TWh of electricity are produced and Bitcoin consumes only 0.35% of it.

Other data can also be seen from the Bitcoin Mining Council - an informal organization in which a very large part of the Bitcoin miners participate. Every 3 months they share a report summarizing their activities. They calculate not just the consumed electricity, but also the consumed energy in general. Both from Bitcoin and from the rest of the world.

Electricity is a secondary source of energy that is obtained by converting various primary sources such as gas, coal, nuclear, solar and wind energy into electricity. Electricity generation represents only a small part of all energy generation and consumption. I.e. natural gas or oil can be burned to produce electricity, but these primary sources can also be directly used for other purposes, for example in transport.

The total annual consumption of energy in all its forms equals about 165317 TWh. The BMC estimates the energy consumption of the Bitcoin network is 253 TWh of energy, which equals to 0.15% of all the energy that is used in the world.

Therefore, a global monetary system that is not subject to corruption and that is many times better than any form of money ever used by humans, by all types of calculations "costs" less than 0.5% of the energy or electricity consumed.

Naturally, here we can open the question of what is "meaningful" energy consumption and what is "meaningless". We can talk about the consumption of Christmas lights, clothe dryers, air conditioners, internet, Netflix, etc. However, hardly anyone is interested in such answers, because the important thing is what we get from a given tool, not so much how much energy the tool in question consumes.

If we lived in the Sahara, we might have been opposed to the energy consumed by heating appliances around the world. If we didn't travel, we would consider the fuel for airplane flights a waste, and if we do not have access to the Internet and television, we may also be against the electricity consumed by the huge data centers of Google, Amazon, Microsoft or Netflix.

But back to Bitcoin - if we see no point in its existence or think of it as a financial pyramid, then it doesn't matter if the network will consume as much as a small country or as little as a light bulb - in both cases we would consider the consumption unnecessary and wrong. There are countless articles trying to turn us against Bitcoin because it is using more electricity than Sweden or Malaysia.

But if Bitcoin is of significant and incomparable contribution to humanity, then any consumption would be fully justified. And the higher this consumption, the more security is given to the network, because no one will be able to stop or manipulate it.

After all, humanity has always evolved and thrived on the use of more and more energy. Therefore, it is not so important exactly how much energy Bitcoin consumes, but rather what the energy is and what this consumption is related to - whether it contributes to or hinders humanity.

According to the Bitcoin Mining Council, Bitcoin mining companies are increasingly using electricity mainly from renewable sources because this energy is becoming cheaper and competing more and more with electricity from other sources. As "green" energy is predicted to become cheaper and cheaper, Bitcoin miners will continue to use more and more of this clean energy. Naturally, this is a process, but at least for the moment there is a particularly strong movement in the right direction.

Most of the media and institutions have focused only on their thesis that Bitcoin is bad for the environment and intentionally or not, they do not at all reflect the facts that Bitcoin mining even reduces greenhouse emissions in certain places.

Wherever oil is extracted around the world, natural gas also comes out of the ground, which in many cases is simply a waste product. Since the field was built specifically for oil, it does not have a built-in infrastructure of pipelines to transport this gas, and many of the fields are located in very remote places where the gas simply cannot be used.

Considering that natural gas is mostly composed of methane, and methane is dozens of times more harmful to the environment because it traps much more heat in the atmosphere, oil companies usually just burn this gas. When natural gas is burned, it releases mostly carbon dioxide (CO2) and water into the atmosphere, which is still not optimal, but at least no methane is released directly. The process is known as "gas flaring", and this burning lasts for decades or as long as oil is extracted from the particular site.

According to the World Energy Agency, the efficiency of traditional natural gas burning is about 92%, i.e. about 8% of the methane is still released into the atmosphere, which is an absolute environmental disaster.

This flaring is also a huge waste of a valuable natural resource, and this unresolvable problem is due both to market and economic constraints (it is too expensive to build gas pipelines to every oil field) and to proper regulation and political will to solve it. Bitcoin mining offers a unique and profitable solution to the problem of this routine burn-in – something that no other industry has been able to offer until now.

In recent years, companies have entered the market that use this hitherto unusable natural gas and, through special generators, convert it into electricity and directly use it for bitcoin mining. Without having to transport the gas to other places and without having to burn it in the traditional inefficient way.

Crusoe Energy is one of the new companies mining bitcoin through this gas. They manage to use up to 99.9% of natural gas (vs. ~92% with normal combustion) and claim that when mining bitcoin with their generators, methane emissions can be reduced by 98% compared to traditional combustion, and carbon emissions by 63%.

In other words, any oil company that stops burning unused gas and starts mining Bitcoin with it will be able to instantly reduce all of its greenhouse emissions. On a global scale, this could save tens of millions of tons of carbon and methane emissions each year.

This is already happening in Montana, North Dakota, Wyoming, Colorado, and there are plans for Alaska, Nigeria, Argentina, Germany and many other places. Some of the oil giants that already have arrangements with companies like Crusoe to sell them this "excess" and otherwise simply flared gas are Exxon, ConocoPhilips and Kirkwood Oil and Gas LLC.

According to data from the World Bank, there are thousands of such fields around the world, from which more than 140 billion cubic meters of natural gas are simply burned every year. The energy lost from this waste equals 1367 TWh. I.e. this wasted energy alone could power the entire Bitcoin mining industry many times over and that would have a positive impact on greenhouse emissions and the planet.

But methane emissions can be reduced by Bitcoin not only from oil sites.

Vaspene Energy is another bitcoin mining company that is making an extremely positive contribution to greenhouse emissions and the planet. They capture the methane that is released from landfills, convert it into energy and use it to mine Bitcoin, thereby converting the methane into carbon dioxide and reducing the greenhouse effect due to methane tenfold.

There are over 2,000 landfills in the US alone, and most municipalities do not have the financial resources to build systems to capture this methane because the investment for this is about $4 million for each landfill. Thanks to companies like Vaspene Energy, municipalities can offload and even sell their methane from landfills, thus both solving their problem of releasing methane into the atmosphere and getting money for it.

In both cases described, the more electricity (from excess methane) is used to mine Bitcoin, the better for the climate and the planet.

Bitcoin mining is a highly competitive industry where the most important factor is the cost of the electricity the miners use. If the price of electricity is too high, then the miners are not efficient, they will have to mine at a loss, and they will stop doing so. The only way they can mine efficiently is if they use extremely cheap electricity.

According to CBECI, the average cost of electricity used by bitcoin miners is $0.05 per kWh. And the average price of electricity in the USA is over $0.13 per kWh and for EU - over $0.20 per kWh, which is absolutely unprofitable for this activity. Therefore, Bitcoin miners position themselves in places where the market can offer a lower price. And a low price in an open market is only there, where no one is willing or able to use the energy in question, and that is precisely why it is at such a price.

In the example of energy from natural gas, which is otherwise wasted, Bitcoin miners can secure a price per kWh of less than $0.02, and Vaspene Energy, which uses methane from landfills, achieves an even lower price per kWh.

Yes, Bitcoin is undoubtedly mined with some of the generic "shared" energy, but this does not make economic sense in the long term, and large Bitcoin mining facilities will increasingly concentrate in places where the given energy cannot be efficiently consumed and sold.

On the sites F2Pool and Braiins, a reference can be seen on the more popular Bitcoin mining machines and at what electricity prices they stop being efficient. As of September 2022 most machines stop being efficient with prices above $0.11 per kWh. Anywhere where energy is higher than these values, there should be almost no Bitcoin miners because they would be mining at a loss.

One of the most interesting side effects of Bitcoin mining is that the process stimulates the improvement of the electricity grid and the construction of new power plants from renewable sources, which is a particularly hot topic at the moment.

Generally the demand for electricity is not constant, but changes between seasons, parts of the day and with different climate conditions - there is always at some point a surplus of electricity that cannot be consumed efficiently. At the expense of other periods in which there is a shortage of electricity (for example, during very cold or very hot weather), when the price of energy on the open markets jumps dramatically.

The biggest Bitcoin mining companies already enter into long-term contracts to buy large amounts of electricity from producers at preferential prices. This creates a base level of electricity demand and consumption, which guarantees its constant purchase. And in turn, this stimulates electricity producers to build and maintain additional plants, because in this way they will be able to guarantee the larger production.

When there are grid problems, energy shortages, and price rises, Bitcoin miners can reduce or completely shut down their consumption to help balance the grid and "return" the energy they've already bought and which was initially intended for them. Mining companies can be required to do so by the contracts they enter into, or they can do it voluntarily because it becomes profitable for them to sell that electricity back to the grid. This is already happening in Texas - both winter and summer.

This process may even eliminate the need to pay huge amounts of money to maintain so-called cold reserves, because the market itself can already guarantee the construction and maintenance of this reserve, without having to pay for it throughout the year, but only when there is a real need for additional electricity. Texas is a good example of this.

All these facts show that there are always 2 sides to the argument and that high power consumption is not always necessarily a bad thing. In many cases, higher consumption can even lead to better outcomes for people and the planet. The important thing is to look at all points of the debate and evaluate not only the minuses, but also the pluses of each possible action and not to trust too much the institutions or companies that are trying to push a point.