As a massive energy crisis looms across Europe this winter, bitcoin has a good back. Between platitudes and clichés about its energy consumption, the Satoshi Nakamoto protocol does not have a good press with politicians. Evidence of Europe’s enthusiasm for its MiCa law which focuses on proof-of-work protocols. Except … that some reports, rejected by the mainstream media, come to very different conclusions.
1 – Bitcoin: 0.1% of the electricity consumed worldwide
Bitcoin mining is not about picks and shovels. Rather, the term refers to the process of verification and creation of currency that is at the heart of the Bitcoin ecosystem. Powerful computers are competing to process transactions, solving complex mathematical problems that require five billion (10 to the power of 30, note) numerical “guess” per second.
In return for this deployment of computing power (the famous “proof of work”), miners receive new BTC tokens, which give them a financial incentive to maintain their computers.
In the early years of bitcoin, a crypto enthusiast could mine bitcoin by running software on a laptop. But as bitcoin started generating interest, the amount of energy needed to create BTC increased. A single Bitcoin transaction now requires over 2,000 kilowatts of electricityenough energy to power the average French household for 80 days.
According to the University of Cambridge, whose work is referenced in the material, mining bitcoins accounted for approximately 0.14% of the world’s energy consumption. That’s what consumes a country like… Kazakhstan. Figure repeatedly in a loop by European politicians, who have to decide focusing on proof-of-work protocols with MiCA.
Sometimes demagogues posture. Because the energy that Bitcoin consumes is certainly important but it needs to be put into perspective. Indeed, she is much less than the electrical energy consumed by standby appliances each year. And most importantly, the minors are not in France or Europe!
2 – Bitcoin has less energy than the euro and the dollar
We show that Bitcoin consumes 56 times less energy than the classical system, and that a PoW transaction is 1-5 times more energy efficient even at the individual transaction level.
This is the conclusion of the 27 page report entitled “Bitcoin: Energy efficiency of cryptocurrency payments” published by the firm last summer value chain, a specialist in payment technologies. The result of four years of research, the report undermines the biased methodologies of a study conducted by the University of Cambridge.
For Valuechain researchers, it is necessary to compare the energy consumption of Bitcoin with all aspects of the classic monetary payment system, oh transmitters to distributors going through the mediators :
- cash management of banknotes and coins in cash dispensers, card payments
- point of sale payments
- bank and interbank energy consumption
“When the Bitcoin Lightning layer is compared to the instant payment scheme, Bitcoin achieves exponentially in terms of scalability and efficiency, proving up to a million times more energy efficient per transaction than instant payments”
3 – Miners have long surpassed the 50% carbon-free energy threshold
Another piece of information that is ignored by the mainstream media and environmentalists. More and more miners are turning to renewable energy sources such as wind, solar or hydroelectricity. In fact, the share of green energies in the mix used is falling.
A recent study shows that the use of renewable energy by Bitcoin miners has dropped from an average of 42% in 2020 to 25% in August 2021. Researchers believe that China’s crackdown on crypto, where hydropower – mining operations were launched in abundance once, the main catalyst for this decline.
At present, the share of renewable energy used by miners is little covered in the media. The Bitcoin Mining Council, a group of miners, recently revealed that 60% of mining farms are powered by renewable sources, which is 20% more than the figure shown by the Bitcoin Mining Council. Cambridge Center for Alternative Finance.
But whichever statistic is closer to the truth, many mining farms still use non-green energy sources, it’s a fact. But it is becoming more difficult to hide the growing share, if not most, of the big miners who are linked to eco-responsible facilities.
4 – Miners recover energy that has been wasted over the years
A lot of energy is wasted in American and Kazakh oil wells, and miners plan to take full advantage of it. Oil extraction creates a by-product little known to the general public, a gaseous residue that companies choose to burn due to a lack of infrastructure to reuse it. It is called the “taste”literally the flaringregarding the great flames that burn permanently on the oil fields.
An ecological disaster: the World Bank estimates that flaring is responsible for about 1% of annual global CO2 emissions, out of 150 billion cubic meters of gas burned worldwide (about 4% of global consumption!).
The first miners to use energy from flares were located in the United States. Last February, the oil and gas company ConocoPhilips announced on Tuesday the launch of a pilot project aimed at selling Bitcoin miners its gas flared at a fossil fuel extraction site located in the US state of. North Dakota. Eventually, the company hopes to reduce gas flaring to zero by finding a use for this otherwise wasted energy. According to a report from Crusoe Energy, the process reduces CO2 emissions by around 63% compared to continuous flaring.
The interest of mining farms for these gases is obvious. Miners go where energy is cheap and where they can be useful – and flares tick all the boxes. For oil and gas producers, it’s an opportunity to turn something negative into something positive. Sad spirits will however say that this supports fossil energy producers more but their importance should be reduced…
Debate on Bitcoin: the emergence of ReFi or Regenerative Finance
The debate on Bitcoin should be placed in a wider context, that of a hot new niche in the market: Conradh na Gaeilge projects ReFi (to “Regenerative Finance”). The proposal of these projects is in line with what their name implies: to use the financial windfalls of the crypto ecosystem as an instrument to remedy environmental problems.
We can consider the KlimaDAO project as a pioneer of ReFi. KlimaDAO was launched in 2019 as a fork of OlympusDAO, a project that relied on the OHM token as its treasury medium. Investors were rewarded for holding their OHM tokens. In KlimaDAO, the asset is a carbon credit and the sign is the KLIMA. The mechanism is as follows: users then deposit third-party verified carbon tokens representing emission units into the Fund.
The purpose of the project is to lock many carbon credits into the treasury so that the market price of carbon assets rises, and therefore the cost of pollution rises for the industrial companies that buy these credits.
Unfortunately, KlimaDAO’s market capitalization dropped from $1 billion to less than $15 million in one year, which does not bode well for the platform. But this metric should not obscure its status as a pioneering project. The information collected during the operation of the platform is essential for future projects with the same objectives.
IMPT.io is a project based on the same idea as KlimaDAO, with various improvements that we will talk about below. It aims to do better than its predecessor, which has managed to block more than 500,000 carbon credits so far.
IMPT.io, revolutionizing carbon credits
IMPT.io like its elder KlimaDAO attacks the carbon credit market, by providing a blockchain type solution. There will be two platforms at the heart of the project.
First, a project funding platform on which tokenized carbon credits will be traded. In summary: users buy IMPT tokens, fund ecological projects and receive carbon credits in NFT format in return (1 carbon credit = 1 ton of CO2 avoided / captured by the funded project).
Then a shopping market where 10,000 marks are expected. Each will sell items, and some of their margin will be converted into IMPT tokens, and then into carbon credits. A way for them to offset their ecological footprint.
Crypto-assets are a risky investment.
C+ Charge, recharge your vehicle and earn money
C+ Charge is a blockchain-based electric vehicle charging network that uses cryptocurrencies. The main objective of the project is to promote general mobility and environmental sustainability in particular. It therefore aims to increase the adoption of electric vehicles (EVs) by providing a blockchain-powered solution to streamline payments and the operation of charging stations.
C+ Charge has a native token (CCHG) that, unlike many cryptocurrencies, was designed for a specific purpose. This token will enable its holders to pay for charging their electric car in the network of stations operated and affiliated with C+ Charge in North America and Europe.
CCHG token holders will also enjoy a number of benefits such as free fares, special discounts and other incentives from C+ Charge partners, but most importantly rewards in the form of GNT carbon credits.
Crypto-assets are a risky investment.