We might disagree on the anthropogenic nature of climate change, but that’s a conversation for another day. This article assumes that intervention is necessary to curtail the environmental destruction of planet Earth. Resist the temptation to vilify Bitcoin’s energy consumption - allow me to make a case in favour of Bitcoin’s energy use.

"Bitcoin uses too much energy"

Clearly, Bitcoin is useful to some people. Judgments about whether or not something is wasted is best left to those using it. We don't end up with a good society if we start deciding for other people what is useful and what is not.

To people who value a censorship-resistant, neutral, globally accessible, completely decentralised system of currency with no geopolitical attachments, Bitcoin is a very useful application. Some argue it is the most useful application of the 21st century.

You can't do the security of Bitcoin without the investment in energy. Those who say that you can are saying that you can get something of value out of nothing. There's a reason why the security costs that much in terms of energy; if you do it for less, it's less secure. If it's less secure, you won't have a valuable network.

The energy in Bitcoin is not wasted - it's used to make the network secure without central authority. No one has demonstrated at scale an alternative.

What about Proof of Stake?

There is a lot of complexity in using an intrinsic currency as stake for the security of the same currency. The game theory gets very complicated. Proof of Work is straightforward: you spend resources on energy in order to secure the virtual asset. If you decide to undo it, not only do you lose the value of the virtual asset, but you also spent money on energy that you are not going to get back. This creates a level of grounding.

This is the primary basis on which Bitcoin achieves immutability; the idea that it is as computationally expensive to re-write the ledger as it was to spend energy to write the ledger the first time. It is one of the security guarantees that Bitcoin has - in order to re-write the ledger, you have to expend the energy again, but you receive the reward once. This makes it very expensive to re-write even small stretches of the ledger. We do not know of a better basis for immutability that doesn't use energy, and I would challenge anyone who claims that there is.

The Nirvana fallacy - comparing Bitcoin to something perfect

If this world produced all energy from renewable resources, and all energy is used for useful things, then perhaps we may look at Bitcoin and ask whether or not the value of Bitcoin is commensurate to the energy we are using. None of the critics considered what energy is being used for today, and how Bitcoin fares in comparison.

Here are 5 examples:

1.) Bitcoin's annual energy use (64.63 TWh as of July 2019) is less than the annual energy expenditure for gold mining (138.9 TWh). Gold was/is integral to the monetary system that Bitcoin is directly trying to replace. There are also environmental costs of mining gold - from sulphuric acid leeching into rivers, denuding hills, destroying mountains, etc. A tiny fraction is being used for industrial use, the vast majority of gold is being held as store of value.