by John Belizaire, CEO
Let’s talk about Bitcoin.
There are two prevailing narratives about Bitcoin in the press and various corners of the internet today.
On one end of the spectrum is the view that Bitcoin might be a promising technology, but it has a terrible side effect on our planet.
On the other end of the spectrum are those that see Bitcoin as the promise of a brighter future for financial services and tens of millions of people around the world. Many say it could even catalyze the renewable energy revolution.
Let’s start with the first narrative.
There’s a view that Bitcoin is a dirty coin and it’s not sustainable.
Why has that view developed?
First, the new technology uses a tremendous amount of energy. Some reports say that it uses close to 1% of the global levels of energy. We’ve seen folks compare its energy use to that of Sweden.
Second, actors or participants on the network have been using technology and developing mining operations in parts of the world that are traditionally very carbon-intensive, like China and Russia. It’s well known that they use coal and other fossil fuels to power these facilities. In that context, Bitcoin’s energy usage is negative. But it doesn’t have to be.
These points are exacerbated by the fact that society hasn’t really put Bitcoin in a positive place in their mind.
Traditional data centers use many times the amount of energy as Bitcoin mining.
Bitcoin mining facilities use somewhere around 0.5% of the global usage whereas traditional data centers use about 3% (growing to around 8%). But we know what data centers do for us. We use them every day. They power our social interactions, our relationships, and our businesses. So we accept that they use a lot of energy.
It seems that the issue many people have with Bitcoin as it relates to energy usage isn’t simply that the technology uses a lot of energy; it’s that it’s using a lot of energy to do something that people don’t like or don’t care about.
The issue with the first prevailing narrative is that it doesn’t give a holistic picture of Bitcoin. So, I want to talk about the second narrative and the more uplifting view of the technology.
Bitcoin represents a source of freedom for a hundred million people around the world, especially in places where trust in the financial system is weak or nonexistent. In countries plagued by monetary instability or high inflation (Argentina, Turkey, Cuba, to name a few), Bitcoin offers a monetary haven for people to put their life savings.
People often complain that the mining process uses a lot of energy. Let’s take a look at what that energy does.
That energy is used to secure the records of all the transactions that have ever happened in the network since Bitcoin’s inception 13 years ago. Mining companies that connect to the network are stamping each of these transactions in a tamper-proof way that protects those assets without requiring a central party for trust. This provides a unique form of security — without which the Bitcoin network would not exist.
Bitcoin’s energy usage is fundamental to the coin’s entire model, not an annoying side effect. Bitcoin’s energy consumption is a feature, not a bug.
Bitcoin could set the foundation for incredible innovations in the financial services industry, very similar to what the internet accomplished over the last 20 years. (And the internet, by the way, is a decentralized technology just like Bitcoin. Oh, and it’s a fundamental foundation of Bitcoin.)
Moreover, Bitcoin’s energy usage doesn’t have to be dirty. Because the type of computing that is happening on the Bitcoin network has a unique characteristic — it can be paused or batched — you can put that process to sleep and wake it back up again, and you can do that anywhere in the world. These characteristics make Bitcoin perfectly suited as a new flexible load or new consumer for renewable energy. You can use this type of computing to absorb excess renewable energy, which is one of the biggest challenges in renewable energy development.
That’s what we’re doing at Soluna.
We’re using this advanced new technology and giving it another amazing application that will be positive and valuable to the world.
Perhaps that can help to put Bitcoin in a positive place in America’s psyche.
I’m pretty bullish about it.
I’m excited about the technology, especially as it fuels what we’re doing at Soluna — using this type of computing and other types of computing, like scientific research and machine learning, to unlock the full potential of renewable energy.