In the previous section, we understood that the security of the Bitcoin protocol relies on high energy consumption to produce a public ledger of transactions without a trusted third party. In mainstream media, the overall energy cost is often compared to the electricity usage of a small country. But does this comparison make sense? Is it relevant to understand the reasons behind such costs?

First, let's qualitatively assess the environmental cost of mining. A miner must have a machine like an ASIC and a source of energy in the form of electricity to power these machines. ASICs are mostly made of aluminum and can be either recycled or reused for a second purpose (as demonstrated by the Attakaï project described in our course MIN201), which transforms an Antminer S9 into a space heater). The main concern is therefore the energy consumption.

The electricity consumption represents almost all of the costs for a miner. Therefore, they are encouraged to find a cheap source of electricity, so they can go to places where power plants are installed but not yet connected to the electrical grid of the territory. In this case, miners act as a last resort buyer, allowing power plants to secure financing even before being connected to the electrical network. When they are connected, the demand for electricity will increase, which will raise the price and make it less profitable for miners to obtain electricity in these places. Since the machines can be easily moved, miners will then decide to take their installation and settle further away where the demand is low and so is the price, most often in areas where they can get energy from green power plants.

Thus, the debate on the ecological impact of Bitcoin is often misguided, mainly due to an insufficient understanding of its usefulness. Bitcoin cannot be evaluated simply in terms of energy costs per transaction, because miners secure both the current and historical network, and transactions are grouped and not all equivalent. Besides, the impact of the Lightning Network is not even taken into account. Those who claim that Bitcoin consumes too much energy may have political motivations or seek to sell their own blockchain solution. Many times, the ecological pretext is used to justify the banning of Bitcoin.

It is important to emphasize that Bitcoin, as a revolutionary invention, provides a means for individuals living under financial oppression or dictatorial regimes to fight for their freedom. As a last resort, Bitcoin offers a pathway to financial independence by circumventing censorship and banking restrictions. More than just a currency, Bitcoin serves as a form of communication and a symbol of freedom, and the energy expended by miners plays a crucial role in defending this freedom, enabling emancipation from a financial system dominated by debt and excessive monetary creation by central banks.

For those living in countries with high inflation rates, Bitcoin is a matter of survival. It provides a means to survive in precarious financial situations. Furthermore, Bitcoin offers a more equitable and impartial financial system, providing billions of people worldwide with access to financial resources. Given this perspective, is the energy consumption justified?

Finally, it is essential to discuss the economic and environmental consequences of Bitcoin adoption.

When comparing it to the current financial system, the latter, due to its encouragement of overconsumption and debt, poses serious problems. Factors such as easy access to credit, monetary issuance by banks, and the practice of fractional reserve banking all contribute to over-indebtedness and, as a result, excessive consumption.

It is necessary to reform the monetary system in order to reflect the scarcity of our resources with the scarcity of our currency. This will encourage more responsible consumption and a long-term vision. Conversely, inflation, by encouraging consumption and investment, has a negative long-term impact on the environment.

The current financial system aligns with the ideas of Keynesian economics, which, unlike Austrian economics, does not take into account the temporal and dynamic aspects of situations and resources. In other words, an unlimited currency cannot effectively represent the limited resources of our planet.

Politicians usually have short-term vision and they need economic growth to be reelected, so they are not able to solve ecological problems in the long term. The adoption of a sound currency like Bitcoin is a potential alternative that could empower people economically.

Critics do not acknowledge that Bitcoin promotes the use of green energy. For example, the flames ignited in oil wells sites to burn methane and prevent pollution can be extinguished by Bitcoin miners, because methane can be converted into electricity to power mining machines, which is beneficial for the environment.

Satoshi Nakamoto released the Bitcoin protocol in January 2009, which has since evolved thanks to a growing community of developers, miners, and users with Bitcoin nodes. By keeping their own copy of the Bitcoin blockchain, a public ledger of all Bitcoin transactions, these nodes can ensure the validity of transactions according to Bitcoin's consensus rules. This includes ensuring that miners produce valid blocks, which contain thousands of pending transactions.

On average, a block is created every 10 minutes, and the miner who finds a valid hash for the next block is rewarded by the protocol with both a subsidy amount that is defined by the consensus rules, as well as the transaction fees from all transactions included in the valid block. Since the result of the hashing algorithm (SHA256) for a given input is considered unpredictable, the mining process involves building numerous candidate blocks and testing if their hash is valid or not. However, to ensure that the average time between two blocks remains constant (~10 mins) regardless of the number of miners and their computing power, the difficulty of finding a valid hash adjusts every 2016 blocks, approximately every 2 weeks. Miners have developed specialized SHA256 machines over time, called ASICS, to increase the hash rate per joule, which means the number of attempts per second per consumed energy.

In order for miners to be as profitable as possible in their activity, they must obtain the cheapest electricity possible, which is often in remote locations, within power plants that are not yet connected to the grid. The miner then acts as a buyer of last resort, and, as soon as the price of electricity increases due to an rise in demand, the miner will tend to relocate their activity elsewhere.

Thus, the Bitcoin protocol is an uncensorable and unstoppable monetary system because each component of the protocol is distributed geographically across the globe. For example, there are more than 40,000 Bitcoin nodes across all continents. Bitcoin's consensus rules are such that it is economically more profitable to follow them than to try to break them, and therefore no trust is required between actors. Bitcoin has no leader and cannot be stopped. Even if it is possible to regulate exchange platforms to limit Bitcoin, this approach has a marginal impact on the system. In short, no judge or state can censor or stop Bitcoin.