Bitcoin’s Energy Transparency is a Double-Edged Sword: Hut 8 CEO

Conversations surrounding Bitcoin’s sustainability often touch on how much power the network consumes. But the mere fact that its power consumption is a known factor is notable, according to Canadian Bitcoin miner Hut 8’s CEO Jaime Leverton.

“We see our energy use, really, as a feature of proof of work,” she said, referencing the process by which Bitcoin transactions are verified on the latest episode of Decrypt’s gm podcast.

Critics like Massachusetts Senator Elizabeth Warren have slammed Bitcoin mining as a contributor to the climate crisis. Bitcoin faithful like MicroStrategy CEO Michael Saylor counter with the notion that miners give what would be wasted energy a new purpose, effectively storing it in cyberspace as Bitcoin.

Bitcoin mining consumes roughly the same amount of electricity as Washington state—putting pressure on our power grids and worsening the #ClimateCrisis. We need to protect our planet and crack down on environmentally wasteful crypto mining practices. https://t.co/ChKYcD82gH

— Elizabeth Warren (@SenWarren) September 7, 2021

Regardless, the environmental footprint of Bitcoin mining has been well documented, in part because Bitcoin’s hashrate is public. The measure captures the computational force being 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 play out in front of everyone’s eyes creates a degree of transparency innate to Bitcoin mining—one that isn’t 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. “Whereas, you can’t see how much energy is used by the traditional fiat banking system or by hard metal mining.”

In terms of where miners source their power, Leverton noted that the Bitcoin Mining Council produces quarterly reports by surveying industry participants. The latest report found that around 60% of the power tapped by BMC’s members—which comprise nearly of the Bitcoin mining industry globally—came from a sustainable power mix, harnessing sources like solar, wind, and hydro electricity.

«That data is incredibly relevant,» Leverton said. «It differs from other industries that aren’t transparent about their energy use.»

The conversation surrounding Bitcoin’s energy consumption reignited last month partly due to the “Skull of Satoshi,” an art installation unveiled as part of Greenpeace’s “Change the Code, Not the Climate” campaign. Working with the 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 making a judgment about Bitcoin’s energy consumption is influenced by whether or not someone thinks Bitcoin itself has any value, Leverton said. And she argued that the value versus energy critique hasn’t historically been applied to other forms of technology with the same scrutiny, overlooking the potential that Bitcoin has to offer financial services to the globe’s unbanked population at the same time.

“We don’t talk about how much energy the gaming industry uses, as an example, or whether video games have value to the broader population,” she said. “We just accept that we know we assume that’s a lot of energy, but we don’t have a value debate about it.”

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