Chapter 1: The Energy Dilemma of Bitcoin

Writing about cryptocurrencies is challenging for me, as I have a deep appreciation for blockchain technology, but I am critical of the frenzy surrounding it. The focus predominantly falls on Bitcoin, overshadowing other cryptocurrencies like Ethereum, which, while significant, play a secondary role in this narrative.

Bitcoin operates on an astonishingly high energy consumption model. The “miners” behind Bitcoin's creation are responsible for this excessive energy use, surpassing the annual energy consumption of Argentina.

> “What a miner essentially does is attempt to generate a 64-digit hexadecimal number (a 'hash') that meets or falls below a specific target hash. It boils down to a guessing game” (Mining).

The first miner to correctly guess the number earns a Bitcoin. As the price of Bitcoin has skyrocketed—now reaching $58,000—an increasing number of miners are joining the competition. This results in trillions of guesses needing to be made, leading to millions of computers operating around the clock.

> “‘Bitcoin is inherently inefficient,’ stated David Gerard, author of Attack of the 50 Foot Blockchain. ‘More efficient mining hardware doesn’t solve the problem; it merely competes with other efficient hardware. Consequently, Bitcoin's energy demands and its associated CO2 emissions continue to escalate. It’s concerning that so much energy is squandered in what amounts to a lottery’” (Bitcoin Consumes).

If Bitcoin were genuinely addressing income inequality, we might consider ways to make it more sustainable. However, it is actually worsening this issue. My disdain for cryptocurrencies is amplified by the community's obsession with wealth—profit for profit's sake seems to be their only motivation, indifferent to the implications of how that wealth is acquired.

Interestingly, Elon Musk, often hailed as an environmental champion for his electric vehicles, has invested heavily in Bitcoin. After receiving a $1.5 billion environmental subsidy from the U.S. government, he promptly purchased an equivalent amount of Bitcoin, thereby increasing Tesla's carbon footprint through its “indirect emissions.”

Tesla promotes a vision of the future, yet their Bitcoin investment raises questions: what kind of future are they investing in? By endorsing Bitcoin's energy-intensive “proof of work” mining model, they perpetuate the very hypocrisy that threatens our climate stability.

Bitcoin's current mining process is likely to evolve, particularly if a carbon tax is enforced, prompting a shift away from the proof of work model. Until that transition occurs, however, enormous quantities of energy are consumed in the quest for Bitcoin, reminiscent of the 1849 California Gold Rush, where individuals worldwide are driven by a modern form of gold fever, justifying ecological harm for ever-increasing rewards.

Chapter 2: Blockchain's Potential

Amid many societal grievances, two stand out to me: the prevalence of fake news, a manifestation of propaganda, and the growing income disparity—both of which intensify the climate crisis.

In its most innovative form, blockchain technology can combat and alleviate these issues. Its potential applications are limited only by human creativity. At its core, blockchain can provide robust security for personal information, passwords, property deeds, medical records, and more, ensuring they are safely stored within its units of information.

Blockchain also holds the revolutionary capacity to address America's escalating value crisis, which fuels income inequality. I am currently working on a project called CityToken, aimed at helping struggling cities generate tangible value for their residents. In simple terms, residents earn tokens by contributing positively to their communities.

These CityTokens, which are not mined through proof of work, incentivize community engagement. By completing a beneficial act for someone, the resident receives acknowledgment, which is then recorded on the blockchain, transferring an agreed-upon amount of CityTokens to their crypto wallet. This new form of currency can be utilized for various community services, such as childcare at local centers.

The possibilities for blockchain applications are boundless, yet they do not capture the allure of Bitcoin's speculative returns, which is why much of the attention—both in the blockchain community and traditional finance—remains fixated on it. Empowering thousands in struggling cities may not attract the interest of major financial players like Elon Musk, but it should.

Furthermore, blockchain can be ingeniously utilized to reward environmentally sustainable behaviors. While trends like reusable bags and bottles are well-intentioned, they often distract from the bigger picture. For instance, driving an SUV a short distance to buy groceries with a reusable bag does little to help the environment.

Imagine a system where we earn rewards through blockchain verification for walking to the store or using reusable items. This could lead to transformative behavior changes, promoting sustainability while addressing income inequality.

The current state of our world—with its myriad injustices, misinformation, and environmental destruction—could be radically improved through equitable practices enabled by blockchain technology.

By shifting our focus from Bitcoin's speculative mindset to alternatives like CityToken, we could harness the blockchain's capabilities for a more promising future.

It’s essential to grasp this: each Bitcoin transaction necessitates validation by the entire Bitcoin blockchain. This verification, under the proof of work system, produces 300 kilograms of carbon emissions. In contrast, transactions on blockchains that use “consensusless algorithms” emit only a few grams of carbon.

What purpose does this pollution serve? Can you identify a single positive outcome from Bitcoin wealth? Elon Musk's $1.5 billion Bitcoin purchase resulted in nine million kilograms (19.8 million pounds) of carbon emissions.

The potential of blockchain is immense. I am not just an advocate but a passionate proponent of its ability to verify truth. Still, the self-importance of Bitcoin enthusiasts can be disheartening to many within the blockchain community. They assert it lays the groundwork for a society without government-controlled currencies, which is true; however, human greed—the same greed that drove us to Bitcoin—keeps us mired in a cycle of wealth accumulation that harms our planet.

Nic Carter from Coindesk recently highlighted the daily earnings of Bitcoin miners:

> “Currently, bitcoin miners generate around $50 million per day, translating to approximately $18.2 billion annually. Remarkably, 85% of this revenue does not come from transaction fees but from the creation of new bitcoins” (The Frustrating Debate About Bitcoin Energy).

In truth, I am indifferent to the profits of miners. The potential societal benefits he discusses stem from blockchain technology, not from Bitcoin itself. The attention focused on Bitcoin may suggest it offers numerous benefits, but it fails to address societal challenges; instead, it creates new ones.

It’s time to reconsider this obsession.

The video "Nature's Hidden Healing Powers w/ Dr. Jack Kruse" explores the intricate connections within nature that can offer solutions to our current crises.