Earth Day is prime time for brands and people to promote their pre-existing products to the masses, swaddled up in a green package. So perhaps it’s no surprise that area shaman Jack Dorsey and meme enthusiast Elon Musk are pumping bitcoin, a cryptocurrency both men hold and that their respective companies invest heavily in, as environmentally friendly.
Dorsey’s firm Square released a white paper on Wednesday (technically not Earth Day, but hey, it’s Earth Week now) in conjunction with ARK Invest “to argue for bitcoin as a key driver of renewable energy’s future.” Dorsey quote retweeted it, Musk replied with an endorsement, and the uncritical hype cycle was on. Cathie Wood, the CEO of ARK Invest who I have been informed is into a book supposedly penned by Jesus via auto writing, also hopped on the hype train by quote retweeting Dorsey. Choo choo!
The paper’s argument is that bitcoin mining uses a lot of energy, yes, but that’s good for renewable adoptions, actually. The paper points to a concept in the energy sector known as the “duck curve” where energy demand peaks in the mornings and especially evenings when people are home while renewable generation tends to peak during the day when the sun is shining. The resulting lines look like a duck.
The mismatch in supply and demand means battery storage is a primary solution to ensuring a world that runs on 100% renewable energy can keep up with demand. Batteries, of course, cost money. Their costs are falling and will keep falling tremendously this decade. But the white paper argues the world will never possibly be able to install enough batteries and keep costs low. The solution is, of course, bitcoin mining with rigs nibbling on what the paper somewhat grossly refers to as “whatever remains of the ‘duck’s belly.’” Basically, ARK Invest and Square are saying miners should pick over the carcass of the energy system and generate bitcoin revenue for operators.
Of course, there are a few rubs with this grisly plan. The first caveat the paper notes is that “it wouldn’t be entirely green from day one.” Indeed, renewables only power about a quarter of the grid globally (and the majority of that is hydropower, a source that doesn’t need much in the way of battery storage). So the idea of installing more mining rigs — which are designed to run 24/7 since going down means no profit — now just means they’d continue to be a huge source of emissions by using fossil fuel-generated power.
That also points to a fallacy around them scooping up excess power in the day and then just shutting off for the night. The whole point of running a mining rig is to make money. The best way to make money is to be permanently switched on trying to mine bitcoin. The idea that miners would somehow just nibble at the “duck’s belly” (ew, again, I’m sorry) and be content is not borne out by data.
Then there’s the issue mining supposedly solves. The idea that there are only two options — mine bitcoin or let the energy go to waste — is laughable. Once a bitcoin mining operation uses energy, that’s it. It’s gone. Rigs can’t magically spit it back out on the grid. Installing more batteries is one possible solution. So, too, is putting the energy generated to other uses. Why isn’t Dorsey hype on making cement or renewable hydrogen, technologies that have more widespread beneficial uses than bitcoin such as “building stuff?” Or what about charging EVs midday, energy that could actually be put back on the grid in the evening if needed to meet demand?
The most comical part of this is Dorsey’s statement that “#bitcoin incentivizes renewable energy.” Bitcoin does absolutely nothing of the sort. If it did, the network would be migrating to places with the cleanest energy already. What bitcoin incentivizes is massive energy use, of any form, at the lowest cost possible. That’s why it’s shown up in coal-friendly provinces of China and in Iran after sanctions left that country with a glut of oil to burn. That’s why the mining network’s energy footprint is equivalent to the entire Netherlands, according to cryptocurrency monitoring site Digiconomist.
Look, I get it. Musk and Dorsey love bitcoin. It’s cool, it made them richer! Congrats to them and the owners of bitcoin and the people who love mining and all that. Maybe bitcoin bulls are right and it will one day be the currency the world runs on! But to try and pretend it’s anything other than a financially lucrative endeavour at this point, let alone one that could some lead to a clean energy revolution, is laughable.
What incentivizes renewable energy are regulations that wind down the fossil fuel industry and public investments that help drop the cost of renewables and battery storage even further. The idea that bitcoin alone is the solution is akin to the NRA saying the only thing that can stop a bad guy with a gun is a good guy with a gun. This is not that hard, people.
Anyways, happy Earth Day or whatever.
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