Things have been going from bad to worse for speculators (sorry, investors) ever since:\u00a0<\/p>\n
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How can all these coins be worth 40 percent less today than they were yesterday? It makes no sense\u2014except to those who\u2019ve been in this world so long they\u2019ve forgotten that.\u00a0<\/p>\n
And where does it leave those of us toiling in the small but exclusive Bitcoin SV section of the crypto woods? Well, we\u2019re not out of them yet, evidently.\u00a0<\/p>\n
But back to my conversations with outsiders. If anyone wants to talk about Bitcoin, then I go into my \u2018Bitcoin SV is different\u2019 lecture. The trouble is, it\u2019s a long one and a lot to take in at once. Moving from the big crypto picture to a narrower field in which \u2018very different\u2019 begins to make any sense is an epic journey and I fear many people get lost on the way.<\/p>\n
If anyone is still paying attention after I\u2019ve separated BSV from the rest, then we can return to the green question. I don\u2019t claim to be an expert, but it makes sense to say that bigger blocks containing more transactions mean that energy per transaction is less on BSV than on a chain like BTC which can only process a more restricted throughput.\u00a0<\/p>\n
That\u2019s easy enough to say, but I fear is not the end of the story because energy usage depends on how many miners are trying<\/em> to find a block, and that\u2019s different from how much data will be in the block. The bigger the reward for winning a block, whether in block reward payments or transaction fees, the more miners will find it worth playing the game, using more energy. So if the dollar value of BSV or the perceived value of its network rises, then more miners will join, counteracting the efficiency gains from having more transactions per block. So that argument only really works at a very superficial level and is actually a little misleading.<\/p>\n Where BSV is a clear winner is in its overall direction. It\u2019s focused on useful applications, not just speculation. However much energy is used, at least it\u2019s for a purpose: data is being stored, microtransactions are being processed\u2014whether health data, weather stats, social media interactions or many other kinds. Compare that with the energy powering BTC whose only purpose is to make BTC owners richer.\u00a0<\/p>\n It\u2019s even worse than that because every dollar invested in BTC is a dollar that might otherwise be employed for something worthwhile. It could be invested in the stock market, creating jobs and businesses. Or used to put a roof over people\u2019s heads. Or be spent on a holiday, supporting hotels, restaurants and those poor people whose job it is to wander round the beach collecting rent on deck chairs. But no, BTC just sits there, doing nothing useful.\u00a0<\/p>\n One argument that makes sense in the green debate is about miners\u2019 incentives\u2014and this applies whatever coin is being mined. Whatever miners spend on energy comes straight out of their profits. So they\u2019re incentivised to use as little as possible and to acquire it as cheaply as possible. Of course, they\u2019re not unique in that: everyone wants their energy cheap. But the fact that miners are big customers who are also relatively mobile means they can have more effect than other industries. Just as cloud computing facilities have been built near renewable energy sources, so miners can locate themselves near to the cheapest energy sources, making them more economically viable.\u00a0\u00a0<\/p>\n In fact, less portable industries are also starting to operate like that. Hydropower in Sweden is being used to split hydrogen from water as a source of energy to melt iron ore in steel-making. \u2018Eco-steel\u2019 will be used by Volvo. And as the Economist helpfully points out, this dramatically improves the ecological impact of car-making: \u201cFor each tonne of steel produced using fossil fuels, around two tonnes of planet-cooking carbon dioxide gets belched into the atmosphere.\u201d<\/p>\n An extreme libertarian view of the \u2018waste\u2019 of electricity in Bitcoin mining would be that if people want to spend their money like that they should be allowed to: who\u2019s to say what\u2019s waste and what isn\u2019t if the market supports a particular activity? Why is steel-making with fossil fuels any better than Bitcoin mining?<\/p>\n If you don\u2019t want to go quite that far and would allow that individuals and society can legitimately have views about what\u2019s worth doing and what\u2019s not, then you might decide that the question of Bitcoin mining is a matter not for individuals or Bitcoin businesses but for governments. After all, we\u2019re used to governments legislating on pollution, the environment, industrial development or market regulation and there are plenty of mechanisms available. People are discouraged from driving their cars, for instance, by the tax on petrol. Bitcoin SV supporters are firmly in favour of working within conventional regulatory frameworks, so this feels like an appropriate line to take.<\/p>\n The best hope for BSV\u2019s long-term relationship with energy is that it will grow into an essential component of everyday life for billions of people, using thousands of new businesses. Once again, the Economist has encouraging news. It considers what will happen when Covid is eventually brought under control by looking at the aftermath of Spanish flu in the 1920s. A recent book found \u201cincreased expressions of risk-taking\u201d when the danger was over. Another study reported a boom in startups. This same effect could be happening now: \u201cToday new business formation is once again surging across the rich world, as entrepreneurs seek to fill gaps in the market.\u201d<\/p>\n With more people thinking about starting businesses, some will find their way to BSV. And as BSV businesses eat into the markets of AWS and other cloud providers, not to mention the work of banks and payment processors, then the energy those existing businesses currently use could be replaced by a mining network that is constantly striving for efficiency. That\u2019s how Bitcoin could earn its green credentials.\u00a0<\/p>\n