Is Bitcoin Mining Really That Bad for the Environment?

Dive into Bitcoin mining with Kirk David Phillips, CPA, CMA, CFE, CBP as talks straight about the environmental impact, breaks down mining mechanics, and explores renewable energy solutions—all while showcasing Bitcoin's fraud-fighting superpower: immutability. 

Watch the Kirk & Robin Show: Bitcoin Mining and the Environment: How Bad Is It, Really? for a lively discussion on this topic.

First, what is Bitcoin mining?

According to Kirk, it’s essentially where participants supply computing power to secure the network. And since Bitcoin is not a company and doesn't have a CEO, doesn't have an office building, this computing power is what keeps everything running securely.

Now, why would anyone dedicate all that energy to Bitcoin mining?

It all comes down to the carrot: the Bitcoin mining rewards. When Bitcoin miners successfully mine a block, it automatically produces a Coinbase reward, which is like the “birth” of a Bitcoin – when a Bitcoin goes from nothing to something. Kind of like a new baby Bitcoin gets produced every 10 minutes.

This reward acts as the incentive for individuals and companies to invest in specialized computer equipment and hook it up to the Bitcoin network. These aren't your average desktops, mind you. These are specialized computer that have intense computing power designed specifically for only one thing which is Bitcoin calculations. And the total computing power? Currently, it's around 800 quadrillion hashes per second or 800 quadrillion calculations per second!

So, what about the Bitcoin mining impact on the environment?

Now, let's get to the elephant in the room: the environmental impact. It does take a lot of electrical input to power these operations. And this significant energy consumption is where the mining gets a bad rap.

But there’s an interesting angle to consider here, according to Kirk, who states that Bitcoin miners are incentivized to go seek out and use renewable energy. They're actively seeking out wind power, waterpower, and even off-gases from old waste sites.

Bitcoin mining impact offset by value

Beyond the energy consumption, it's crucial to understand the value that Bitcoin mining provides. One of the key aspects is security, which stems from the decentralized nature and the immense computing power backing the network. Another vital aspect is "immutability.” While it's not impossible to alter the Bitcoin ledger, it is infeasible to alter the Bitcoin blockchain. You can trust that information hasn't been altered.

While Bitcoin mining and the environment is a valid concern due to its energy demands, it's not a simple "bad" or "good" situation. The incentives within the Bitcoin network are driving miners towards renewable energy sources, and the process underpins a technology that offers unprecedented levels of security and immutability.
 

As always, your goal is to get a Crypto Bullseye™.