The founder of Digiconomist, Alex de Vries, predicts that, in the long run, the cost of mining a Bitcoin will rise to the price of a Bitcoin. de Vries was referring to economic theory, which states competition will drive profits down over time.
de Vries, whose website studies the consequences of digital trends from an economic perspective, says, under this scenario, competitive mining will generate further environmental damage by producing more carbon dioxide.
What’s more, the knock-on effects of (say) a $500,000 Bitcoin would compound the issue, leading to an environmental disaster.
But with others claiming the BTC network already runs on majority renewable sources, is this report simply another FUD attempt to crash the Bitcoin party?
Bitcoin recovers from FUD
Since bottoming at $29,800 in mid-July, Bitcoin has posted a strong recovery. More so this past week as bulls wind up in the hopes of taking $50,000 – a key psychological price level.
With that, talk of crypto winter has all but disappeared, and the prospect of a $100,000 end-of-year price seems like a real possibility.
Indeed, Bitcoin’s bullish moves of late have set off a wave of lofty price predictions. Including a $300,000 end-of-year target from on-chain analyst Willy Woo. All the way through to Dan Held’s extreme $9.5 million per token price prediction at some point in the future.
However, should the price of Bitcoin approach these sky-high levels, de Vries and others fear the network’s carbon footprint would expand to calamitous proportions.
The environmental cost of a booming BTC price
It follows that the laws of supply and demand will push the price of BTC up, increasing mining revenue and profitability, as it becomes increasingly scarce over time.
In turn, this will attract more miners to join the network, pushing up mining difficulty, and in the long run, make an already competitive endeavor even more competitive, thus less profitable.
Nonetheless, by de Vries calculations, the dynamics involved with a $500,000 Bitcoin price would produce 617 million metric tons of CO2 a year – an amount far greater than most individual countries.
“That volume exceeds the footprint for Australia by 56%, Brazil by 40%, South Africa by 40%, and Mexico by 33%. Bitcoin mining would be spreading 70% more carbon gases annually than the United Kingdom’s 352 million metric tons.”
As serious as that seems, questions over de Vries claims exist. For example, a 2019 study by CoinShares estimates almost three-quarters of the Bitcoin network runs on renewable energy.
If so, this would largely negate de Vries’ claims of a CO2 disaster.
Get an edge on the cryptoasset market
Access more crypto insights and context in every article as a paid member of CryptoSlate Edge.
On-chain analysis
Price snapshots
More context
Join now for $19/month Explore all benefits
Like what you see? Subscribe for updates.
The founding father of Digiconomist, Alex de Vries, predicts that, in the long term, the price of mining a Bitcoin will rise to the value of a Bitcoin. de Vries was referring to financial idea, which states competitors will drive income down over time.
de Vries, whose web site research the results of digital developments from an financial perspective, says, beneath this state of affairs, aggressive mining will generate additional environmental harm by producing extra carbon dioxide.
What’s extra, the knock-on results of (say) a $500,000 Bitcoin would compound the difficulty, resulting in an environmental catastrophe.
However with others claiming the BTC community already runs on majority renewable sources, is that this report merely one other FUD try to crash the Bitcoin occasion?
Bitcoin recovers from FUD
Since bottoming at $29,800 in mid-July, Bitcoin has posted a robust restoration. Extra so this previous week as bulls wind up within the hopes of taking $50,000 – a key psychological worth degree.
With that, discuss of crypto winter has all however disappeared, and the prospect of a $100,000 end-of-year worth looks like an actual chance.
Certainly, Bitcoin’s bullish strikes of late have set off a wave of lofty worth predictions. Together with a $300,000 end-of-year goal from on-chain analyst Willy Woo. All over to Dan Held’s excessive $9.5 million per token worth prediction sooner or later sooner or later.
Nonetheless, ought to the value of Bitcoin strategy these sky-high ranges, de Vries and others concern the community’s carbon footprint would develop to calamitous proportions.
The environmental value of a booming BTC worth
It follows that the legal guidelines of provide and demand will push the value of BTC up, growing mining income and profitability, because it turns into more and more scarce over time.
In flip, this can entice extra miners to affix the community, pushing up mining issue, and in the long term, make an already aggressive endeavor much more aggressive, thus much less worthwhile.
Nonetheless, by de Vries calculations, the dynamics concerned with a $500,000 Bitcoin worth would produce 617 million metric tons of CO2 a 12 months – an quantity far higher than most particular person international locations.
“That quantity exceeds the footprint for Australia by 56%, Brazil by 40%, South Africa by 40%, and Mexico by 33%. Bitcoin mining can be spreading 70% extra carbon gases yearly than the UK’s 352 million metric tons.”
As severe as that appears, questions over de Vries claims exist. For instance, a 2019 examine by CoinShares estimates nearly three-quarters of the Bitcoin community runs on renewable power.
In that case, this may largely negate de Vries’ claims of a CO2 catastrophe.
Get an edge on the cryptoasset market
Entry extra crypto insights and context in each article as a paid member of CryptoSlate Edge.
On-chain evaluation
Value snapshots
Extra context
Be a part of now for $19/month Discover all advantages
Like what you see? Subscribe for updates.
