Bitcoin’s Energy Transparency Is a Double-Edged Sword: Hut 8 CEO
Conversations around Bitcoin’s sustainability often touch on how much power the network uses. But just the fact that power consumption is a known factor is noteworthy, according to Canadian Bitcoin miner Hut 8’s CEO Jaime Leverton.
“We really look at our energy use as a function of proof of work,” she said, referring to the process by which Bitcoin transactions are verified in the latest episode of Decrypthis gm podcast.
Critics such as Massachusetts Senator Elizabeth Warren have criticized Bitcoin mining as a contributor to the climate crisis. Bitcoin stalwarts like MicroStrategy CEO Michael Saylor oppose the notion of miners repurposing what would be wasted energy, effectively storing it in cyberspace like Bitcoin.
Regardless, the environmental footprint of Bitcoin mining has been well documented, in part because Bitcoin’s hashrate is public. The measure captures the computational power used across Bitcoin’s network as miners race to solve Bitcoin’s next block by continuously crunching complex calculations.
Leverton said that having this competition in front of everyone’s eyes creates a level of transparency that is innate to Bitcoin mining — one not shared by the traditional financial system.
“It’s easy to see how much energy is used by Bitcoin miners because it’s publicly available information,” she said. “While you can’t see how much energy is used by the traditional fiat banking system or by hard metal mining.”
As for where miners get their power, Leverton noted that the Bitcoin Mining Council produces quarterly reports from mapping industry participants. The latest report found that around 60% of the electricity harnessed by BMC’s members – which make up almost all of the Bitcoin mining industry globally – came from a sustainable power mix, utilizing sources such as solar, wind and hydropower.
“This data is incredibly relevant,” Leverton said. “It differs from other industries that are not transparent about their energy use.”
The conversation surrounding Bitcoin’s energy consumption reignited last month, in part because of the “Skull of Satoshi,” an art installation unveiled as part of Greenpeace’s “Change the Code, Not the Climate” campaign. Working with artist Benjamin Von Wong, the international environmental NGO sought to bring attention to Bitcoin’s carbon footprint. (Von Wong later said that his black-and-white perception of Bitcoin mining was wrong.)
But judging Bitcoin’s energy consumption is influenced by whether someone believes Bitcoin itself has any value, Leverton said. And she argued that the value versus energy critique has historically not been applied to other forms of technology with the same scrutiny, overlooking the potential that Bitcoin has to provide financial services to the globe’s unbanked population at the same time.
“We’re not talking about how much energy the gaming industry uses, for example, or whether video games have value to the wider population,” she said. “We just accept that we know that we assume that there is a lot of energy, but we have no value debate about it.”
