Bitcoin: A path to an abundant and sustainable future
An open letter to Greenpeace USA
This article began as an open letter to a representative of Greenpeace USA, by the name of Josh.
Josh had been speaking at a Solana conference, expressing some concern that speaking on environmental issues wouldn’t have been possible at a Bitcoin conference, without turning into a target for tomatoes.
We wrote to reassure Josh that far from being pelted with soft fruit, the reception might actually have left Greenpeace feeling reassured that many Bitcoiners share the same concerns and worries, and are doing as much as they can in order to make our world, and our processes for generating electricity, greener and more sustainable in the long run.
Dear Josh,
Introduction first: I’m a lawyer, based in the UK. My day job is at an electric vehicle company, but I also co-founded Bitcoin Policy UK.
We’re a volunteer, not for profit organisation, run by individuals giving up their time to educate and inform politicians and the wider public about Bitcoin. Like you, I regard carbon emissions as a huge problem and something that we should collectively work to fix. Unlike you, I believe Bitcoin (and proof of work) can be part of the solution. Hopefully the rest of this letter will explain why.
Before we get going, I’m sorry you felt you couldn’t have attended a Bitcoin conference and given your presentation there. In fact, there are very many Bitcoiners who share your concerns and you’d be very welcome; I suggest you watch the clip here by way of example:
Obi Nwosu, Mark Morton and Margot Paez are here speaking about issues that I’m sure also interest you. Please do especially watch the last few minutes and the magnificent summary given by Margot. It’s extremely moving and sets the stage for much of the rest of my letter. Also, if you come to a Bitcoin conference with me, I will personally ensure that no one throws tomatoes at you!
So - I believe a lot of the issues surrounding Bitcoin’s energy use come from the perception that Bitcoin is useless. A lot of other things that humans do use a lot of energy (heating homes, tumble driers, aircon, Christmas lights - see the visualisation here from the Cambridge Bitcoin Electricity Consumption index: https://ccaf.io/cbnsi/cbeci/ghg/comparisons ). I think, and so do many others, that Bitcoin is uniquely useful, and important, and that proof of work is a critical component in making it so. Why, is a matter for another letter, but in summary proof of work is the only incorruptible way of creating a non-government form of digital cash that cannot be gamed or manipulated by powerful individuals to their benefit and to the detriment of everyone else.
And that is the first problem we want to address, to fix money, and to separate it from the state, much as church and state were separated centuries ago.
However, for Bitcoiners who share our environmental concerns, it’s not just about fixing the money. Proof of work miners are very unusual buyers of electricity. They do not need to run continuously, like other data centres. They can be turned on and off very quickly, and can be located in very odd places, far from where people live. Miners are incentivized to find the cheapest sources of power, which are often wasted or stranded forms of energy. This makes them uniquely suited for all kinds of unusual operating scenarios, that ironically can help us make great strides towards a net zero world with a sustainable power grid.
Remember - Bitcoin miners don’t emit any CO2. They simply buy electricity. They are in this sense no different from electric cars.
Electricity generation can, and does emit CO2. This is the real problem - and is the second problem that we also want to fix.
I wanted to set out a few concrete examples of what I’m talking about, as much of this is counterintuitive and, like you, I was once genuinely concerned about Bitcoin’s carbon footprint. There are a number of examples in this post and in this excellent and comprehensive thread but it’s worth listing a few highlights here.
You may have seen this paper recently published by KPMG: https://advisory.kpmg.us/articles/2023/bitcoin-role-esg-imperative.html .
Their conclusion? "Bitcoin appears to provide a number of benefits across an ESG framework...new and innovative ways of leveraging the network continue to emerge, such as helping to stabilise energy grids, reduce greenhouse gas emissions, and even assist with providing sustainable heat to commercial and residential properties."
A few more key issues to consider , with links for further reading:
1. Bootstrapping and stabilising the renewable grid: You may have seen this article about the problems facing new sustainable power plants and the long wait for grid connection: https://theguardian.com/business/2023/may/08/uk-green-energy-projects-in-limbo-as-grid-struggles-to-keep-pace. Bitcoin miners are the most flexible customers available for an electricity grid and can make new renewable plants economically viable from day one (https://coindesk.com/policy/2021/10/11/bitcoin-mining-is-reshaping-the-energy-sector-and-no-one-is-talking-about-it/). Bitcoin miners will buy up spare capacity when it is not needed and turn off quickly when demand is high. We recommend a review of recent statements made by the CEO of the Electric Reliability Council of Texas, where Bitcoin miners are already collaborating with renewable energy providers to stabilise the grid, in order to understand further detail on this topic:
https://twitter.com/ShaunEnergy/status/1505920632705327106?s=20&t=RPjAEy_1xE3u1M3q3ft5lA.
A Bitcoin miner, unlike any other customer, will give a renewable grid enough excess power margin in order to keep the grid running at times of high demand; miners will buy up the excess power margin when not required by the grid and can power down in minutes when demand increases (https://cnbc.com/2022/02/03/winter-storm-descends-on-texas-bitcoin-miners-shut-off-to-protect-ercot.html). No other buyer of electricity is able to do this, and thus enable a renewable grid both to maintain consistently high power output capability, and to stay economically viable throughout.
This is a developing area of power generation but is very promising as regards our capability to create a viable renewable grid in the near term (https://twitter.com/level39/status/1548550264218583040). Furthermore, a large number of miners are in fact located ‘behind the meter’ at power generation facilities themselves, and able to use stranded or excess energy that the grid cannot accommodate (which would otherwise be wasted or curtailed). Mining containers are highly mobile and can be moved quickly to a location as and when needed. Curtailment is a huge problem for the wind energy industry, resulting in a vast amount of power that is simply wasted (in 2020 and 2021, there was 5.8TWh of wind curtailment in the UK; this is enough to power 800,000 homes: https://drax.com/wp-content/uploads/2022/06/Drax-LCP-Renewable-curtailment-report-1.pdf )
2. Methane Mitigation: The UK government has stated that ‘Cutting methane emissions is one of the fastest and most cost-effective tools available to limit global temperature rise to 1.5°C.’ (https://gov.uk/government/publications/united-kingdom-methane-memorandum/united-kingdom-methane-memorandum). Bitcoin mining can assist in these mitigation efforts, predominantly as a buyer of first and last resort for landfill gas emissions (see Vespene). The World Economic Forum has recently highlighted the potential for Bitcoin mining to do exactly this, profiling the work of Crusoe Energy (https://crusoeenergy.com) in capturing stranded methane and using it to power Bitcoin mining data centres (WEF report on Crusoe) .
Marathon Digital Holdings now has an operational methane mining facility - preventing methane from ever reaching the atmosphere and effectively making the operation carbon negative: https://ir.mara.com/news-events/press-releases/detail/1330/marathon-digital-holdings-announces-energization-of-its
I'd also highlight the recent statements from the White House report on Climate and Energy Implications of Crypto-assets in the United States that “Climate policy aligned with achieving net-zero emissions would have zero methane venting and zero methane flaring. A combination of regulation and technological innovation can help realise this vision... Crypto-asset mining that installs equipment to use vented methane to generate electricity for operations is more likely to help rather than hinder U.S. climate objectives".
3. Other ESG advantages – such as mining’s integration into anaerobic digestion, microgrids in Africa, or bootstrapping recycling and supporting circular communities/conservation efforts/repurposing waste heat….
There are an awful lot of examples to cite in this very broad category, so I will be as brief as I can:
(i) Mining on a farm using methane from an anaerobic digester (power would otherwise be wasted):
(ii) Using the waste heat from miners to heat a greenhouse and reducing heating costs: https://euronews.com/next/2022/12/14/a-bitcoin-miner-and-tulip-grower-team-up-to-reduce-costs
(iii) Mining as an additional source of income in remote locations: https://cointelegraph.com/news/how-bitcoin-mining-saved-africa-s-oldest-national-park-from-bankruptcy
(iv) Bootstrapping renewable microgrids in Africa: Gridless
(v) A surf school for disadvantaged kids in South Africa built around Bitcoin: Bitcoin Ekasi
(vi) Mining in Guatemala with used cooking oil and reducing its pollutant effects: https://typefully.com/teemupleb/c27OMEH
(vii) Heating swimming pools with miners: A data centre is already doing this (https://bbc.co.uk/news/technology-64939558) and I have started talks with a UK town council to see if there would be scope to help keep a school pool open via using solar powered bitcoin miners in the same way.
There are many, many dedicated Bitcoiners who’d be happy to go into more detail here, such as Daniel Batten, Susie Violet Ward, Russell Rukin or Margot Paez.
Just reach out, and they’ll reach back. And thanks to Joe Hall, who motivated me to write this open letter!
Ultimately, Bitcoin has caused me to think at great lengths about what kind of world we want.
And I want a world where everyone is free to use an open, permissionless, incorruptible digital money, that no government or powerful central bank can manipulate, inflate away or debase. A world where every house is heated by a Bitcoin miner, where wasted energy is used and not lost, where wind, solar and hydroelectric grids are balanced and supported by the Bitcoin network’s mining power; and where power itself is taken from the hands of those who abuse it, and is given back to us.
So I hope this letter is merely the first step towards mutual understanding and collaboration. If after reading it, you still really do want to ‘Change The Code’, you can - anyone is free to submit a Bitcoin Improvement Proposal here and anyone is free to attempt to change the code if they want to: https://github.com/bitcoin/bips. But much like inventing a new language, it’s one thing to do it and another to convince everyone else to speak it.
Or, you can reconsider, step across the aisle, and work with us to change the world instead.
The choice is up to you.