Why ESG Concern Trolls Are Just Trolls. The persistence of this argument proves that nobody knows anything about economics.
The narrative that bitcoin wastes energy has persisted but the bitcoin community has not yet produced the appropriate rebuttal.
There are many aspects to understanding this argument, but let’s start with the most fundamental. Everything requires energy, so what is permissable and what isn’t and why?
1.Energy consumption is something everything produced and consumed requires. If bitcoin wasn’t providing value for people, they wouldn’t be paying for it. People have to pay for the security that bitcoin is providing, and so to these users, bitcoin is improving their lives. Trade only happens when an individual values one thing over another. How can some claim it’s wasting energy when it’s providing value to those who use it? Sure, you don’t like it because you think it’s not valuable, but why should you be able to dictate what others do with their money?
Generally the amount of energy consumed in producing a product is reflected in its market price. That’s why when the price of oil rises, so does almost everything everyone uses on a daily basis like food, transportation, heating, cooling, etc. Why does it matter if individuals choose to spend their energy money on bitcoin over something else like plane ticket for travel? Bitcoin is not increasing total energy output as money spent on bitcoin is money not spent on something else, both of which consume equal amounts of energy.
Charles Edwards of capriole.io has developed a bitcoin indicator based upon the cost of energy consumed in hashpower. His model shows that bitcoin tends to trade around its energy equivelant value that went into the network.
Since we know the market capitalization of bitcoin every second of every day, we can estimate how much energy it is consuming. This leads me to point number two.
2. When discussing bitcoin’s energy consumption It is important to. compare it with the alternatives in the monetary market.
The market for state monies is expensive. Think about the costs associated with protecting the monopoly on government issued money, the energy required in enforcing world reserve currency dominance militarily, and the energy being consumed by wasteful government entities paid for via taxation through inflation.
I think it’s obious that state money costs more in energy at today’s market prices as state money is 100x larger than the crypto currency market. The US defense department alone spends more than the entire market cap in bitcoin every year. Is operating miilitary bases, planes, warships, bomb production better for the environment? Is this utilizing more clean energy than individuals who are just trying to avoid paying for these predatory military forces via bitcoin? I think the average person cares more about the environment, and therefore their tax savings that come from resisting state inflation frees that tax money up to be used towards protecting their local environment.
3. We know that individuals tend to minimize their costs, so that if the cost of using bitcoin is less than the cost of using the state money, then he/she will probably choose to use the former. Because of these cost savings, it can be argued that bitcoin consumes less energy than the energy that the state is going to consume with the taxation imposed via inflation. So actually, in the most likely of scenarios, total energy consumed is reduced.
I think it’s important to understand that the ESG concern trolling is less about environmental concerns and more about the state discrediting competition to its control over money. When we know the state consumes orders of magnitudes more dirty energy consumed than bitcoin, how can we take them seriously? It’s the same type of concern trolling the propoganda artists at world Central Banks do in enacting climate change policies. “You need us to protect you from x, so give us control over your sovereignty.”
Think for yourself. Resist propoganda.