"It’s almost as if mainstream media has been searching for another platform from which to justify its judgmental condescension."
"It’s a clever idea, if your aim is to reverse the growing global acceptance that Bitcoin mining
can be a positive environmental force.
Climate fear mongering has been a tool-of-the-trade for some time in the clicks industry, and it is timely given the ongoing COP28 summit. Combine some existential doom with a scary new financial system that no-one can seemingly control, and the mainstream press will of course lap it up."
"Now, I’m not suggesting that de Vries is part of a coordinated effort to discredit the crypto ecosystem, at a time when official recognition of its environmental potential was starting to consolidate and
legacy finance was getting ready to embrace the opportunity to service a greater range of
Bitcoin products. No, I wouldn’t do that, I’m not a conspiracy theorist.
But you must admit the timing is convenient, and it is remarkable how quickly mainstream media picked up a comment in an obscure scientific journal that I am sure is not part of the journalists’ regular morning reads. Oh, and did I mention that
Alex de Vries works for the Dutch central bank?"
IT JUST AIN'T SO
"Now, on to the main things that de Vries gets wrong."
"First, de Vries attempts to calculate the water consumption
per transaction. This shows either a misunderstanding of how Bitcoin works or a willful misdirect, and since de Vries has been researching Bitcoin energy use for at least five years (that I’m aware of), I’m guessing it’s the latter.
Bitcoin miners in aggregate pay for electricity to process blocks of transactions, and the number of blocks is predictable (one every 10 minutes or so). The calculable metric is consumption (of electricity or water)
per block. Each block can contain one or thousands of transactions, depending on demand and size (in terms of memory consumption). Currently, there are around 3-4,000 transactions per block, but earlier this year, the number was more like 1,000.
And each transaction can contain one or millions of payments, which de Vries neglects to explain."
"Second, de Vries sums together indirect water use via electricity consumption, and direct water use via rig cooling methods, asking us to believe that adding them together produces a useful figure. Water used on-site can be saved for other uses should the Bitcoin miners switch off. Water used by power generators, not necessarily. These are two very different types of water use, which cannot be lumped into one convenient yet irrelevant measure."
"Furthermore, the direct use is not necessarily a water “cost,” as much of the water in cooling methods is re-used. And the indirect consumption (by the electricity source) is also not technically a “cost” since much of the water used by thermal power plants is
returned to its source after cooling. The water used by hydroelectric generation would not be significantly impacted should Bitcoin miners switch off."
"Third, the math is based on very tenuous assumptions. The method de Vries uses is to estimate Bitcoin mining’s energy consumption (based on data from the
Cambridge Bitcoin Electricity Consumption Index), apply an approximate geographical distribution, factor in the average energy mix by region and then extrapolate the water used by each type of energy."
"Apart from the margin of error in each of those factors, this method assumes that all miners are representative of the grid mix in their jurisdictions. This is not so – miners tend to concentrate around lower-cost sources since energy is their main continuing expense, which skews the relevant mix. What’s more, miners increasingly co-locate with energy producers to reduce waste and take advantage of stranded power."
"And the representative geographical mix was based on out-of-date information. Kazakhstan, for example, is given as one of the top-three global mining jurisdictions. That may have been the case in 2021, but today,
there are very few Bitcoin miners in Kazakhstan, as the industry was hit by repeated internet outages, energy shortages and regulatory barriers."
"And yet, we are told, in a scientific journal, that each Bitcoin transaction consumes enough water to fill a small swimming pool. This is supposed to shock us because obviously (!?) a swimming pool is more useful, and the implication is that more Bitcoin transactions means that fewer people would be able to enjoy aquatic recreation."
WHO ARE THE REAL CULPRITS?
"Just when I think my disappointment with mainstream media has reached its peak, I find that there are always new heights to scale. The media handling of de Vries’ comment has been egregious.
Almost all the publications that picked up this article repeated the claims verbatim, without questioning the source of the data or the author’s track record (de Vries has a history of making predictions which end up being off by eye-watering
orders of magnitude).
Some media sources blatantly misstated fact – the
BBC, for instance, conflated “payment” with “transaction”
in their headline.
Futurism led with “The Average Bitcoin Transaction Wastes a Full Swimming Pool of Water, Scientists Say” – note the use of the words “waste” and “scientists.” The
Independent chose the unhelpfully vague “Bitcoin consumes as much water as all the baths in Britain, study claims.” Pretty much all reporting confused “study” with “comment” – the former tends to be peer reviewed, the latter hardly ever. This is either lazy or intentionally misleading."
The WSJ did the same thing back when they ran other stories like, "Bitcoin uses more
energy than (pick a country)".
And that was easily disproven at the time, lacked any real data to back it up, and was just another example of WSJ running clickbait articles that benefit their financial interests.
There's a saying in the Bitcoin community:
Don't Trust, Verify
That is more true today than ever before.
u.today
