This post was most recently updated on December 10th, 2018

Between all the bad comments about Bitcoin, the comment that it “wastes” energy power is the most nonsensical. This way of thinking is contradictory to the fundamentals of the electric power, the way it works and the way markets work.

Electric power is a real-time service which is transmitted by wired lines by specialized companies. It is produced through Nuclear, Hydro Coal, Solar, Wind, etc. Those producers produce energy which is consumed in real time and users are billed per kilowatt-hour. Electricity is used for a lot of purposes like entertainment, heating, cooking, even cars are running on stored electricity these days which is produced by those energy companies.

For the whatever propose you choose to use the energy you will have to pay for it and if you are satisfied, then it can not be considered a waste. Also which is more important the electricity you consumed could not have been used by anybody else after it has been utilized by you. Energy is used only once after that it is gone because it is not a physical thing like water for example.

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So once power enters into your devices and it is consumed, it may by no means be sent back or re-used. That energy power could only ever have been utilized by you, and since you pay for it on the agreed price, how you use it is just your business and nobody’s else. There isn’t any difference among an electricity consumer choosing to warmness their outside swimming pool to 90°F in a cold winter with electricity and a Bitcoin miner performing heavy computer calculations that consumes a lot of electricity. Since electricity is not physical, the wasting concept is subjective.

Bitcoin miners do not consume energy without a purpose, so bitcoin mining does not fit into the category of wasteful activity.

It is important to use English correctly to avoid confusion. There is nothing wrong with to seek efficiency but you can not categorize what people do with a service as to right or wrong. As long they pay for the service it is their choice how do they consume it. Also, electricity is a service that does not produce waste.

Someone can try to make an assumption that the heat created by the mining process is a waste, which is a wrong assumption. Bitcoin miners do not want to produce heat, they want to produce bitcoin. The heat produced during the mining process is a cost they accept. At the same time if a better hardware is created rational miner will go for it as it saves them money, so they can make more profits. The market encourages contributors to attempt for efficiency.

There is a narrative saying “bitcoin is boiling the oceans” from the environmental point of view which is logically wrong. That is because the world is not one energy grid and bitcoin energy usage and the world stock energy are not related. The energy used for Bitcoin mining does not deprive anybody of energy and does not influence the energy price, and on the other hand, bitcoin incentives looking for cheaper energy options like solar and wind.



Soluna wind farm in southern Morocco to power a data center and Bitcoin mining operation. Source: Soluna

When you hear somebody saying that Bitcoin mining wastes energy you can explain why it can not be considered waste because of the way electricity works and many people do not understand.