The problem isn’t that Bitcoin uses a lot of energy. The problem is that people never consider that energy use in context. Yet any headline about Bitcoin and energy never provides that context, because they are essentially hit pieces designed to elicit anger and clicks. Instead, we have to ask: What does that energy get us? How does that energy use compare to the energy used by other systems which perform the same function? A car which gets 10 miles per gallon would have been a fantastic use of energy in 1953, but today it is seen as wasteful. It does the same underlying thing, but the context matters.

Historically, our currencies have been based on incredibly inequitably distributed resources: precious metals and stable governance. Bitcoin is based on energy, which is the most equitably distributed resource on the planet. It literally falls from the sky, it runs through every river and every gust of wind and is found in the earth’s crust as uranium. Sometimes we get energy from unsustainable places, it sucks that any industry (including Bitcoin) uses it. That is a policy and governance problem, not a problem of our monetary system. You should know that Bitcion miners flock to renewable energy sources and over-provisioned grids. Why? Because they need the cheapest energy possible, which tends to come from renewables. Bitcoin miners are “buyers of last resort”, if there was anybody else to buy that energy, they would have bought it, and miners would have been outbid, because miners can’t afford to pay high energy prices as they must compete with every other miner on the planet. This is why Bitcoin mines typically don’t operate during peak demand hours, which is where most fossil fuels are used. Bitcoin, as “buyers of last resort” can be a part of the green revolution, they make it easier for governments to invest in and over-provision renewable infrastructure, and they make that green energy cheaper for everybody else by ensuring that at least someone will buy it during times of low demand. The problem with renewables is that they produce all day whereas people only actually want energy a few times a day.

Energy use is critical for the security of the Bitcoin network. While schemes that don’t use energy have been proposed, they all suffer from some serious trade-offs that make them unsuitable if we are going to build a global reserve currency, including a tendency to cause centralization and to reward the system’s richest participants. If a way is found to avoid using energy while still providing the same level of security and decentralization, Bitcoin is absolutely capable of upgrading its own network to use that new way.

First, let’s look at what Bitcoin does in exchange for that energy: Bitcoin is an economic network that can be accessed by anybody with a cellphone and a halfway reliable internet connection including the billions of people, with a B, who are “unbanked” because they lack access to stable banking infrastructure. It enables anybody (with Bitcoin lightning) to send money internationally in under a second for pennies in fees. Having a settlement time for transactions of basically zero means that in an economy money can move faster. That means increased efficiency for any industry including the banking industry. It also offers us a way to opt out of an unsustainable inflationary currency environment, that is valuable to people as well. Constantly increasing the supply of money robs the money of value, it hurts the lower and middle classes the most. Bank runs happen, and banks are “too big to fail”, so we have to bail them out, which is how the 99% end up paying for the investment risks of the 1%, the system is deeply flawed. But there is no solution to the bailout problem, if our entire economy will collapse if we don’t do the bailout, we have to do the bailout, right?

Second, let’s look at how much energy that takes. Bitcoin currently does this with less than 1% of global electricity usage. Even if it doesn’t replace banking entirely, even if it only replaces remittance services (think PayPal, Western Union, etc). Think of every Western Union kiosk, branch, etc in the entire globe. Think of their lights, their servers, their call centers. How much energy is that? How much energy is used by SWIFT? PayPal? When you start adding these up, you find that we use well over this amount of electricity on remittance services. And we’re not just waiting electricity and earth’s resources, we’re wasting the most valuable assets of all: time and human capital. We don’t need people manually sending bank wires like it’s 1910. We can have those people doing more valuable jobs.

Bitcoin’s market cap is around 850 billion right now. That is bigger than the entire GDP of Sweden or Israel or Vietnam, it’s in the top 25 countries by GDP. It transfers trillions of dollars of transactions every year. The average trend, year on year, is wider adoption and growth. It solves real problems and people recognize it and use it for that purpose. That’s why big banks, hedge funds, and others invest in it.

There is also the wider discussion to be had about predicating our economies on currencies which grow to infinity and how that may not be a sustainable strategy on a planet with non-infinite resources. A currency which is constantly losing value incentivizes people to spend even if they don’t actually need anything, because the currency is going to become worthless given enough time. This means more production is paid for than we actually need. More resources get used up. A deflationary currency, on the other hand, incentivizes the opposite. In a deflationary economic system, somebody producing a good or service must do more to make you want to buy it. In that environment, might products be more reliable? More repairable? Might they be built more sustainably? One can only speculate, but I personally feel positive about the knock-on effects of moving off an inflationary currency system.