Energy: do cryptocurrencies (really) consume too much?
Under pressure from soaring energy prices, governments are looking to further limit the impact of the crypto industry.
The meeting lasted just over two hours. Yesterday, representatives of the French crypto industry were invited to the Ministry of Finance in Bercy to discuss a number of topics, including the sector's energy impact. And that's not all!
This meeting, which is due to be followed by another in October, is no coincidence. It coincides with the forthcoming submission of a government report on the environmental impact of digital activities. It also comes less than ten days after the Head of State, Emmanuel Macron, reiterated that manufacturers would have to tighten their belts in the face of energy shortages.
And the crypto industry is not going to escape the rule.
In fact, the phenomenon is not just French. Wherever governments want to limit energy consumption (and avoid a social explosion), the crypto industry is being called on to make an effort. In recent weeks, some American miners - those who make cryptocurrencies secure with their computers - have been "kindly" forced to limit their activity.
But is this justified?
According to Cambridge University, whose work is a benchmark in the field, bitcoin mining accounts for around 0.14% of global energy consumption. That's about what a country like... Kazakhstan consumes.
Based on this figure, the observation is clear: the energy consumption of cryptos is a real subject that no one can dismiss out of hand. The fact remains that mining remains one of the least "polluting" activities on the planet. According to data from a report published in September 2020 by Cambridge University, 39% of the energy used in bitcoin mining is of renewable origin.
Interrogated a few months ago on the subject before the US Congress, the boss of miner Bitfury, Brian Brooks, for his part explained that 58% of US mining was derived from renewable energy (including hydroelectricity, wind power, solar power, nuclear power and carbon offsetting).
Besides this point, mining has a number of advantages (we'll tell you more about them in Premium very soon) from an environmental point of view.
1/ It helps to finance the construction of facilities such as hydroelectric dams, wind turbines and solar panels. How do they do this? By using surplus energy. All the energy that is not consumed is used to mine, which earns cryptocurrencies, and ultimately finances these facilities crucial to the transition.
2/ Mining also means that energy from "flaring gas" is not wasted. This source of energy that escapes from oil fields (the flames at the top of flares) is often neglected because it is too complicated to exploit. However, as well as capturing this "dirty" energy, mining makes it profitable. According to the World Bank, flaring is responsible for the emission of more than 400 million tonnes of carbon equivalent (France's annual carbon footprint is around 500 million tonnes).