Is Bitcoin really so bad for our environment?
I have started to notice a high increase in concerns about Bitcoin’s impact on an environment as cryptos are gaining a lot of attention these days due to rocketing value and adoption by some well known entities. Basically all those concerns are true and legit as Bitcoin network consumes really big amounts of electricity duo to mining activities. I will not put the details here what is mining and why it consumes so much electricity as there are lots of great sources describing it.
But instead I would like to explore it from a broader philosophical perspective and compare it to other human/technological activities and what is Bitcoins impact on an environment in comparison.
We can usually hear some comparisons against some countries for example Bitcoin network consumes as much (or more) electricity as Argentina or similar comparisons. And it is generally true but maybe it is not a right comparison in my opinion. Maybe it would be more appropriate to compare it to current financial system instead as Bitcoin is more related to it. At least in theory Bitcoin could replace our current financial system or supplement it. I know that it is not there yet nor that it will certainly be true in a future but just try to imagine it and try compare those two systems from imaginary perspective.
I have worked in a bank before as IT security specialist and I have some understanding about how finances are managed today from a technical perspective. I know about all those server farms managing daily banking tasks, all those backup servers, security systems, all those systems monitoring other systems etc. etc. and it is really huge. And on top of that you should also add all those huge buildings, ATMs and other infrastructure. Those buildings have their own IT infrastructure for regulating lights, climate control, security cameras and DVRs, access control systems and so on. If you would calculate environmental impact of the current financial system (I think I have read it somewhere but now I cant remember the source) it would be quite substantial. Just remember that environmental impact is not only electricity but you should count the environmental cost of all those buildings also. They take space and they had to be built. I am not saying that Bitcoin mining does not need some kind of infrastructure – indeed Bitcoin mining farms definitely needs some place but I am quite sure that it is not as much as traditional banking (but I could be wrong – interesting topic to explore).
And Bitcoin (also other decentralized cryptos), all those decentralized exchanges (DEX), dApps and other stuff built on top of blockchain probably (at least in my oppinion) needs less human interaction/intervention or support which also makes this system less labor intensive. Similar to agricultural revolution. Maybe this argument is not directly connected to environment but it is still worth mentioning. I am not definitely sure if less labor intensive leads to less environmental impact here but maybe it does in this case. All those people working in traditional banking system uses real estate and infrastructure. In other words current banking system needs to accommodate and provide services to all those people working in the system – work place which is space and costs to build, electricity for adequate light, water, air conditioning, physical security services and so on. All or some of this adds to environmental impact also.
And now I would like to explore the main philosophical argument about environmental impact. Some time ago I red really interesting article about inflationary system (our current financial system) and it’s impact on our behavior. Inflationary system in itself is creating an incentive for consumerism. And the system makes us think about now and not the future as deflation diminishes the value of the future and increases value of the ‘NOW’. In the future your money is worth less so it is better to spend it now in an inflationary system. In that article you could find even relations between inflationary system and decreasing marriages as marriage is described as long-term thinking and commitment into the future whereas our economic model and financial system actually takes away of us the ability for long-term decisions and thinking.
Bitcoin on the other hand is created to be more a deflationary asset or system in contrary to our current inflationary system. A high contrast was felt by some users already in how those two systems are totally different and how they change our mentality. Maybe not all of you remember the times when Bitcoin value was less than a dollar, then 100 dollars, then thousand, then tens of thousands… I am not saying that it is the right price or is it a bubble or not. I would just like to point out the difference in inflationary and deflationary systems here. Now just think of those people in the early days who bought pizzas for 10000 BTC, spent their BTC like crazy for all irrelevant items, used cars and so on. The list could get quite long I imagine. Just imagine what all or most these people think about their purchases couple or 5-10 years later. A lot of them regret it. Because they actually would be better off if they just kept their BTC intact. This is why over time it got more and more popular to hold BTC and Hodl’ers emerged – people started to understand the deflationary system. I know this is an extreme case with Bitcoin but it perfectly illustrates how deflationary system is different. Such system makes you think carefully about how you spend your money. You are incentivised to think carefully about buying something – if you really need it and if you really need it now.
Deflationary system actually is consumerism’s killer in my opinion as it makes you think before buying. It would create some huge problems for some and it would create a huge chaos if inflationary system would be switched to deflationary but here I am not trying to defend one or another here. Now I am trying to discuss environmental impact and my main point from this is that the hugest impact for environment is actually our behavior – our thoughtless and pointless consumerism. Our way of life and our inability of thinking on terms of future and everything is about now and ME – I want now, I need now… Try to think if it is really soooooo necessary to buy a new car after couple of years just because it is ‘morally old’ and there is a little almost invisible scratch on a backseat, is it really necessary to buy a new smartphone each year just because camera has 12 MP instead of 10, is it necessary to go shopping just because I am bored and throw away everything the next day…, is it really necessary to buy new shoes after half a year (I have wearied them twice huh) just because they are, you know, out of the fashion this season? All this is just crazy meaningless impractical and environmental-damaging our self-implied way of life which brings us nothing of real value except some imaginary self-fulfillment and egoistic satisfaction. But this kind of lifestyle is promoted and rewarded by our current inflationary system – this is how and why the world is ticking.
I know that a lot of people just can’t imagine living differently and our economic model is built on this but this is our main problem. Our pointless ant think-less consumption makes the biggest environmental impact and is killing our planet. Bitcoin is just a little (maybe bigger than little but still not a main reason) droplet in an ocean. And ironically Bitcoin could actually be helpful as it is deflationary asset and in fact could help heal us from our fanatic consumerism.
P.s. Sorry for my poor English. It is not my native language…
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