Conspicuous power consumption is a feature of the Bitcoin model, rather than a flaw, according to a crypto miner who defends the power-hungry activity.
Zach Bradford, CEO of publicly traded Bitcoin miner CleanSpark, waded into the debate sparked by Ethereum Merge, the switch from proof-of-work to proof-of-stake, which could see an order-of-magnitude reduction in the power consumed by the rival cryptocurrency network.
“Proof of work, and the energy it uses, is a feature and not a flaw. There is no CEO of Bitcoin, it is completely decentralized and really proof of work is the only good way to truly protect the blockchain without a supervisor. That has value because Bitcoin is used all over the world as a currency without anyone changing the mechanism,” he said.
While energy consumption is critical to Bitcoin, Bradford argued, the carbon emissions resulting from power generation are not as big an issue for ClearSpark, as the crypto miner uses 90 percent carbon-free energy. Nuclear power accounted for a large part of that, he said.
Bradford also contends that even though there was a global power shortage, his company’s consumption was justified because ClearSpark’s facilities are located in “grid edge areas” where there is excess electricity, such as the US state. from Georgia.
All of this seems reasonable enough until he finds himself in a nasty fight with the evidence. Claims that Bitcoin, and the blockchain on which it is based, are fully decentralized were called into question by a report commissioned by the Defense Advanced Research Projects Agency (DARPA).
Published in June, the report found that the low-level protocols, or cryptographic primitives, underpinning the security of distributed ledger technology were robust, but implementation decisions mean the claim of immutability is questionable. “We show that a subset of participants can gain excessive centralized control over the entire system,” the researchers said.
The study notes that Bitcoin traffic is not encrypted, which means that any third party in the network path between nodes, including ISPs, Wi-Fi hotspot operators, or governments, could observe and send any message. you want. “Of all Bitcoin traffic, 60 percent goes through just three ISPs.”
While ClearSpark may feel like it’s out of the woods in terms of carbon emissions, it’s not very reassuring when you consider the scale of the environmental impact of Bitcoin mining against the small contribution it makes to global financial transactions.
In September, a study by researchers at the University of New Mexico found that in 2020 Bitcoin mining used 75.4 terawatt hours per year (TWhyear-1), higher energy use than Austria (69.9 TWhyear-1). 1) or Portugal (48.4 TWhyear-1).
The team also found that energy emissions for Bitcoin mining had increased 126-fold, from 0.9 tons of emissions per coin in 2016 to 113 tons per coin in 2021. One Bitcoin mined in 2021 created $11,314 in climate damage, with total global damages exceeding $12 billion or 25 percent of market prices. Damage peaked at 156 percent of the coin’s price in May 2020, so that every $1 of Bitcoin’s market value generated $1.56 in global climate damage. The relative damage was slightly higher than the relative damage from meat production (33 percent) and much higher than gold mining (4 percent).
Alex de Vries, the founder of Digiconomist, noted that Bitcoin handles 100 million transactions per year. “That’s completely insignificant when you look at the normal world of finance. Traditional financial institutions are responsible for handling more than 700 billion digital payments every year and that’s growing.”
Bradford counters that Bitcoin was not subject to the whims of central bank policy like conventional currency. Only 21 million will be made, where central banks tend to print money when it suits economic circumstances. Bitcoin is scheduled to peak in 2140, a time ClearSpark is not yet planning for, Bradford said.
“We’ll all be in the metaverse [by then]said Bloomberg TV host Katie Greifeld.
“…and everyone will be using Bitcoin there,” Bradford retorted, proving at least that the media and technology industries can engage in circular groupthink while the planet they depend on has lost 70 percent of its wildlife since. 1970. ®