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Bitcoin Consumes Energy: So? 1) Is it Worth it? 2) What is the Alternative?
Everything we do, including breathing, consumes energy and emits CO2. When confronted with the energy and CO2 questions we should ask:
1) Is it worth it? Is a global and state-neutral decentralized monetary system worth the energy spent?
2) What is the alternative? How much does the current financial system cost?
I’ll leave the first question for the subjective views out there, although my personal subjective view and answer is in the affirmative. Bitcoin is worth it.
Let’s address the second point. What is the cost of the alternative, the current financial system?
According to the Fed’s own research data, the financial system costs more than 8% of GDP in compensation of employees, taxes on production and imports, less subsidies, and gross operating surplus.
<cite>https://fred.stlouisfed.org/series/VAPGDPFI</cite>
Gary Gensler, the SEC Chairman and former MIT lecturer, is seen as a pro-crypto figure on Wall Street. According to him, in the lecture notes he used to teach in his MIT course, he states that the financial sector costs the US 7.5% of its GDP, and the payment sector costs 0.5-1% of global GDP.
He sort of referred to that in his testimony to Congress back in July 2018.
“Blockchain technology has real potential to transform the world of finance. Though
there are many technical and commercial challenges yet to overcome, I’m an
optimist and want to see this new technology succeed. It could lower costs, risks
and economic rents in the financial system.”Maybe he should have a word with Elon Musk and other people who want to have a decentralized global monetary system that costs nothing and consumes no energy.
What do you think? Counter arguments are welcome.
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