GM MIN3RS, @GreenPeace’s recent report ‘Investing in Bitcoin’s Climate Pollution’ describes Bitcoin as a ‘roadblock to progress on adivressing the climate crisis’. However, we argue Bitcoin’s energy consumption + location-agnosticism make it a powerful tool to fight climate change.

1. Energy intensive ≠ environmentally damaging

Critics often cite how Bitcoin consumes as much energy as a small country.

However, Bitcoin consumes a fraction of a % of the energy used in construction/transport & less than the more comparable gold & finance industries. It even consumes less energy annually than US tumble dryers.

Not bad for one of the hardest, most portable, secure, and censorship-resistant assets in the world.

Further, Bitcoin isn’t inherently polluting. It inherits the carbon footprint of its grid. Since China banned mining in 2021, the % of miners using renewables for electricity has risen to over 50%. As renewable adoption continues, this figure will continue to rise.

2. Enabling 100% renewable grids

Legacy energy systems rely on a mix of renewable/non-renewable sources. This is partly because renewable sources are intermittent. Therefore, it is necessary to have a peak supply of ~3x peak demand to run a 100% renewable grid.

By itself, this oversupply is uneconomical. However, Bitcoin miners run on thin margins. The most effective way to improve margins is to use cheap excess energy during peak generation when demand outstrips supply.

This is already practiced in Texas, where Bitcoin mining helps to regulate the grid. Miners operate when supply > demand, and turn off when demand > supply.

In this way, Bitcoin mining can help create the necessary incentive structure to facilitate fully renewable energy grids.

3. Using remote energy sources

As miners are location-agnostic, they can capitalize on opportunities to utilize otherwise wasted energy that typical energy consumers cannot.

One example of this is flaring, a process whereby oil drillers burn the methane produced as a byproduct of drilling when it is geographically uneconomical to capture & use.

Annually, flaring releases as much CO2 as 100 million cars. Bitcoin mining helps solve this problem by taking the market to the natural gas, preventing its atmospheric release.

Because flaring is such a major issue, research suggests using Bitcoin to prevent flaring could be a more cost-effective way of reducing emissions than building wind or solar plants.

Companies like Giga are taking advantage of this, placing shipping containers full of thousands of miners by oil rigs & using the natural gas to power miners.

Beyond flaring, bitcoin miners are also moving next to dams (hydro), volcanoes (geothermal), & landfill sites (methane) to provide a market for their waste energy.