Out of all the misconceptions when it comes to Bitcoin, the misconception that “miners” are creating “bitcoins” is probably the most asinine one.
No, miners are not creating bitcoins. Miners are trying to create valid blocks and are rewarded by the Bitcoin network with newly issued sats if they succeed. This reward is only paid during the network’s bootstrapping phase.
Why is this differentiation important? It is important because Bitcoin’s issuance schedule is completely unrelated to its energy use. It is related to time and time only.
It doesn’t matter how many machines “mine” bitcoin; the same amount of bitcoin will be issued over time.1
Bitcoin’s energy use is related to security and fair distribution of coins, not creating more coins. The same amount of coins would be issued over the same amount of time, even if Satoshi Nakamoto had remained the only person interested in mining bitcoin:
21 million coins, issued in 10-minute intervals, over the course of ~131 years.
If the interest for an open, borderless, transparent, limited, weightless, divisible, digitally native, and easily verifiable electronic cash would’ve stayed with Satoshi and Satoshi only, the energy use of the Bitcoin network would be the energy use of a single CPU.
Bitcoin’s energy use is a measure of interest; its reward mechanism is a distribution mechanism. When it comes to issuance, the higher Bitcoin’s energy use, the fairer the initial distribution of coins.
Bitcoin’s energy use is not a measure of how many of the supposedly useless coins are being produced. The amount of new coins being issued as well as the pace of issuance was fixed from the beginning. The block reward is a mechanism to distribute the total supply of 21 million coins as fairly as possible, without any reliance on a central authority.
Looking at Bitcoin’s issuance schedule should make it immediatly obvious that coins are issued over time, independent of energy use.
If you are offended by Bitcoin’s energy use because you hate the little orange coins that are supposedly being mined, I have bad news for you: the same amount of bitcoins would be issued over the same amount of time, even if Bitcoin’s kilowatt-hours would be close to zero. The same amount of sats would exist, and surprisingly, the network could be used by the same amount of people as it is today. It would just be centralized, insecure, easily influenced, easily altered, prone to censorship, prone to corruption, and catering to special interests.2
Saying that you want the Bitcoin network to use less energy exposes you as either naively uninformed, dangerously authoritarian, or both. A decrease in Bitcoin’s energy use is a decrease in security, fair distribution, and resistance to hostile alteration. If you are cheering for a reduction in hashrate you are cheering for centralization and ease of corruption.
Saying that you hate Bitcoin because it uses energy is like saying that you hate turtles because they grow shells.
“Wouldn’t it be great if all the turtles go naked, so that any predator could easily swoop down and swallow them whole?”
If you think that Bitcoin is useless, any energy that Bitcoin uses will seem like a waste. If you think that Bitcoin is useful, the question as to how much energy it should use is as unanswerable as how many Christmas lights or tumble dryers are enough. You can’t answer such a question; only the distributed cognition of the market can answer that question.
With all that being said, allow me to present a three-step program that will allow you, dear reader, to get less triggered regarding Bitcoin’s energy use going forward:
- Step 1: Check your financial privilege.
- Step 2: Understand the necessity of proof-of-work.
- Step 3:3 Understand the genius that is the difficulty adjustment, which ensures that Bitcoin uses a certain amount of energy, always and forever, into the future:
…exactly the right amount.
- German translation by Georg
- Greek translation by Nina
- German audio by Rob
- German translation by Sinautoshi
- French translation by Sovereign Monk
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