That assumes that the demand for electricity is not price elastic.

The weird thing here is that Bitcoin doesn't care about whether it's mined with clean electricity or other, and the realities of the market are pretty opaque. When people correctly point out that Bitcoin mining consumes a lot of energy, a bunch of people immediately make the claim that most of this energy must come from excess renewable sources. But there's actually no reason at all to believe this, very little evidence in favor of it, and nothing in the Bitcoin system design that ensures it. It's basically an article of faith -- because the alternative would be objectively horrifying.

We could design cryptocurrency systems that deliberately focus on using excess renewables, or just plain use less energy for mining. But the problem is that "Bitcoin" has come to stand in for "a cryptocurrency using the specific design choices that its inventor made more than a decade ago" and so privileging Bitcoin itself makes these choices impossible. The very best possible outcome is that (small-b) bitcoin tokens will eventually migrate to more efficient consensus networks, and the big-B Bitcoin network itself will be spun down to consume less power.

I think you are a bit too pessimistic about it. Bitcoin mining is location invariant and its cost are mainly driven by energy costs, can we agree on that? We should also agree that in certain (many) locations renewable energy sources are the cheapest ones. Based on this you can also see it as an alternative store of value / money that also subsidises renewable energy demand. This drives development of new technologies and efficiency improvements due to economies of scale. Wouldn’t it be nice if you could buy solar panels as cheap as the rasperry pi foundation is able to source its arm processor (where the cheapness is also coming from an orthogonal use case with scale effects)?

Bitcoin has done shit for the environment or for reneweable energy.

I would love to see a real example where you would proof me wrong.

Nonetheless, bitcoin itself is not necssary and it doesn't solve a problem.

People trust currencies. I trust currencies.

Bitcoin also has to have a trust system and right now it is connected to currencies. It is not decoupled. The only thing bitcoin is, its irradical and its basically gambling.

Doesn't this argument imply that the way to stop climate change is to use as much energy as possible in order to subsidize renewable energy production?

If a miner's power source is on the grid, it doesn't really matter all that much if they own a hydro plant, a solar plant, a coal plant, or are just buying power off the market. Either way, they are increasing the total energy consumption of the grid and their environmental footprint is determined by the grid average emissions and the amount of power the miner uses.

If they've built an off-grid renewable power station, you might argue it would otherwise not been built and is therefore relatively neutral, emission-wise. I think that argument would be wrong, because of the scale of large mining operations.

If you can build new renewable energy capacity at a competitive price and at sufficient scale to power a large mining operation, that's one thing and has nothing to do with whether or not you mine crypto with that energy. Deciding to not sell to the grid at that scale seems irrational, and honestly I doubt miners also operate power stations except maybe at a hobbyist level.

> We could design cryptocurrency systems that deliberately focus on using excess renewables

Could we? I thought Ethereum still had a pretty big digital/physical gap. In that there was no way to digitally ensure a physical truth (barring third party attestation).

It only assumes that demand is not 100% price elastic, which is almost guaranteed to be true.

The household demand for electricity is non-elastic.

That really isn't how most grids work. There are large times where prices are now negative because of oversupply of renewables.

Mining by it's nature has energy as its largest input cost, so it chases lower and more efficient sources of energy which are largely renewable energy

Further, good renewable sources are often poorly located for electricity distribution. You have situations where the power wouldn't otherwise be used, so it is being tapped into Bitcoin.

Iceland has a pretty much infinite supply of clean energy with geothermal. They're not interconnected to the grid so previously they would export that energy via aluminum, today they can export it with bitcoin and other processing (colo compute)

Georgia has also become a destination for bitcoin mining and it is largely hydro power

The reports on what bitcoin's proportion of renewable sources vary very widely from ~75%[0] and ~25%[1]

You can debate the methodologies of these estimates all day - but one thing to note is that the worst case estimates take an emissions factor which is average _for an entire country_ - while large scale mining operations (which account for the vast majority of mining) are often colocated in specific cheaper regions, usually around hydro/renewable power

The only X factor is that a lot of energy for bitcoin is sourced corruptly. The Chinese are already some way towards resolving that (they have an incentive to!) and shut down the heavily subsidized dirty mining that was happening[2]

My main takeaway is that the trends points to bitcoin eventually becoming a lot more efficient, and potentially can be used as a regulating mechanism on grids or as a way to export energy from renewable sources that aren't well interconnected

[0] https://coinshares.com/research/bitcoin-mining-network-decem...

[1] https://www.cell.com/joule/fulltext/S2542-4351(19)30255-7

[2] https://www.coindesk.com/bitmain-ebang-bitcoin-mining-energy...

> They're not interconnected to the grid so previously they would export that energy via aluminum

Ok, but now somebody else is making that aluminum.

There's always something we could do with free energy, including making carbon-neutral liquid fuels or ammonia fertilizer, or taking CO2 out of the atmosphere.

If Bitcoin were the only way to have a working cryptocurrency, there'd at least be an argument for it. Now that proof-of-stake is available, Bitcoin's energy consumption is pure waste, since we can have essentially the same product without using the energy.