Bitcoin always had its critics. From regulators to bankers, the financial aspect of Bitcoin was a bone of contention to many. Another pain-point with Bitcoin was its production, or rather the energy-intensive nature of Bitcoin mining.
Financial freedom for environmental harm was a small price to pay for many. Yet some could not balance the claim of having a decentralized currency if it came at the cost of the environment, especially as Bitcoin’s main store-of-value rival, gold was also in the same energy-intensive boat.
Mining of Bitcoin and gold is burdensome and harmful, yes. But the way we’re looking at it should be less in absolute terms, and more in how the money spent translates into resources consumed to “mine and secure the asset,” according to Chris Burniske, partner at Placeholder Venture Capital.
In a Twitter thread, he stated that the “world values $BTC at a premium to gold.”
"But that means it's worse for the environment!" some will say. It's not so much about the absolute dollars that go into production, but instead how those dollars translate into *consumed resources* to mine and secure the asset.
— Chris Burniske (@cburniske) January 9, 2020
Citing a report from Arca, Burniske stated that Bitcoin’s production is more sustainable when compared to gold. The report stated that in 2017, Barrick Gold Corp. mined 5.3 million pounds of gold or 6 percent of total mined gold with diesel fuel as the main expenditure. Arca stated that, in terms of crude oil usage accounts, the cost of gold is 0.27 percent worldwide oil consumption.
Over three-quarters of the energy that goes into Bitcoin production comes from “renewable resource,” compared to gold’s use of diesel fuel. Burniske predicted that since Bitcoin’s energy source requires no “marring of the Earth’s surface,” then it has higher odds of becoming “100% renewable,” and will do so faster than gold.
The Bitcoin miners, together with the rest of the industry, being more conscious of the environment, will increasingly gravitate towards a more renewable approach to production. Burniske stated that since Bitcoin is a new technology, one that was born and developed in the lifetime of the people most affected by environmental degradation, they have further motivation, if not incentive, to migrate to a more sustainable form of mining.
Gold, in his opinion, would not only be more energy-intensive, but would be a reminder of “centuries past,” with no use aside from the ‘bling factor.’
In closing, Burniske stated,
“If rising generations realize #bitcoin and #gold provide equivalent services but $BTC is much more sustainably produced, that alone could cause them to migrate.”