Analysis

ESG Organizations Send Letter To Congress About PoW Mining, Bitcoin Responds

Will the ESG FUD ever cease? As a Congressional subcommittee prepares to take take a look at Proof-Of-Work mining, “more than 70” nationwide, worldwide, state and native organizations wrote a letter to the “Congressional leadership.” In it, they use previous and unreliable information to get their level throughout. They utterly ignore all of 2021’s analysis and progress on the matter, as a result of it could invalidate their argument.

The query is, will Congress purchase their poorly researched, alarmist letter? The ESG FUD hit PoW mining like a ton of bricks in 2021. It may be based mostly on a poor understanding of the topic at hand, however the public basically positively purchased it. And they quote the bogus numbers that their authorities invented left and proper on social media. 

Related Reading | Despite Crackdown, Bitcoin Mining Is Still Alive And Well In China

Also, the entire argument utterly ignores the primary advantage of Bitcoin. The orange coin gives a framework and instruments for the world’s transition to a disinflationary system. Paraphrasing “The Price Of Tomorrow’s” writer Jeff Booth, within the inflationary system that we dwell in, there’s a transparent incentive for consumption. If your cash’s buying energy decreases by the minute, all people will logically purchase, spend, and eat the whole lot in sight. That is the true monster that the planet’s dealing with. And Bitcoin fixes it.  

In any case, Bitcoin’s resident ESG FUD knowledgeable, Nic Carter, took it upon himself to answer to the ESG organizations that despatched misinformation to Congress. Let’s see how every half did.

The ESG Organizations Make Their Point, Nic Carter Counterpoints

The ESG organizations come out swinging from the introduction on: 

“We, the more than 70 climate, economic, racial justice, business and local organizations, write to you today to urge Congress to take steps to mitigate the considerable contribution portions of the cryptocurrency markets are making to climate change and the resulting greenhouse gas (GHG) emissions, environmental, and climate justice impacts it will have.”

And their accuracies begin from the get-go, additionally:

“In 2018, scientists writing in Nature warned that Bitcoin’s growth alone could singlehandedly push global emissions above 2 degrees Celsius within less than three decades.”

Those numbers are ridiculous. They “assume” a development relative to the variety of customers of the community, and that’s merely not how Bitcoin works. Even if the entire planet adopted the Bitcoin commonplace, the community would nonetheless produce one block each ten minutes. Energy consumption isn’t instantly associated to the variety of customers. 

What did Nic Carter reply? That the declare is “false, based on a debunked paper with a completely erroneous model of bitcoin.”

Right after that, the ESG organizations even throw Ethereum underneath the bus:

“The Digiconomist’s Ethereum Energy Consumption Index estimates that the Ethereum blockchain will consume 71 terawatt-hours this year, nearly the same as the energy consumption of Colombia.”

Since the letter is about PoW mining, it is smart. The Ethereum group appears to have utterly ignored the letter, at the very least over at Twitter. 

BTCUSD price chart for 01/07/2021 - TradingView

BTC price chart for 01/07/2021 on Bitstamp | Source: BTC/USD on TradingView.com

Bitcoin Incentivizes Green Energy Infrastructure

The ESG organizations proceed their poorly-researched assault with:

“The GHG emissions from this exorbitant and unnecessary energy consumption is staggering.”

It’s not pointless in any respect. In truth, PoW mining is completely important for a decentralized, permissionless system. And the vitality consumption is instantly proportional to the safety of the community. Plus, it anchors it to the true world. Not to say the truth that Bitcoin truly incentivizes and finances green energy infrastructure.

Then, the ESG crowd accuses Bitcoin of “exacerbating” the worldwide chip scarcity:

“Increased demand for these machines are exacerbating a worldwide scarcity of semiconductors. A bipartisan invoice by Senators Maggie Hassan and Joni Ernst has referred to as for a report on how cryptocurrency mining operations are impacting semiconductor provide chains.“

With ease, Nic Carter counterattacks with: “Bitcoin miners are not tier 1 clients, they don’t compete with Apple/Qualcomm/NVIDIA for space; the shortage is due to money printing and the demand shock. See section on semis here.”

Texas Doesn’t Know What Its Doing, The ESG Crowd Does

Then, the ESG investigators make wild, unbacked assumptions about Texas energy:

“Following a crackdown on cryptocurrency miners in China, many miners are moving to Texas, due to its deregulated grid, taking away the power that Texans need.”

This utterly ignores the truth that the state of Texas has gone to nice lengths to draw these miners. And that, in contrast to the ESG organizations that signed the notorious letter, energy firms in Texas frequently attend Bitcoin conferences. They are making an effort to know the expertise and the alternatives it brings to them. Also, as Carter places it, “Majority of mining is in west texas where transmission bottlenecks mean prices routinely go negative. Huge overcapacity and limited demand for power outside of mining.”

The state of Texas is aware of what it’s doing, they see Bitcoin’s future is vibrant. These ESG organizations suppose they know higher, although:

“Adding more energy-guzzling crypto mining operations to Texas could exacerbate the sorts of blackouts the state already saw during the extreme cold in February — outages that reporting shows hit communities of color the hardest.”

Wow, taking part in the race card there. So low. And unrelated. Anyway, answering the declare that miners “could exacerbate” the February blackouts, Carter says. “Miners were/ would have been offline during this time, as we demonstrate here. They also help alleviate ‘black start’ issues through primary frequency response.” 

Three Other Prominent Bitcoiners’ Response

Are these direct responses to the ESG organizations’ letter? It’s not clear, however the authors printed them in the identical timeframe. The first one refers to SHA256, the set of cryptographic hash features that Bitcoin makes use of. Nunchuk founder Hugo Nguyen stated, “Once you understand that SHA256 is close to being 100% efficient at what it does, you’d stop calling it a “waste”. In truth, 100% effectivity is the precise reverse of “waste”. There’s nothing else prefer it.”

For his half, Swan Bitcoin’s Brandon Quittem assaults the idea of vitality consumption being inherently unhealthy. “Energy consumption is directly correlated with GDP. Want to help developing countries? Help them harness more energy. Interestingly, Bitcoin acts as a free market subsidy for energy investment.”

And Kraken’s Dan Held states that “Bitcoin’s energy consumption is not “wasteful.” Why? Because “It is much more efficient than existing financial systems.” And we’re speaking orders of magnitude, right here. Not solely that, “No one has the moral authority to tell you what is a good or bad use of energy (ex: watching the Kardashians).”

Do you know the way a lot vitality American households use for his or her Christmas lights? As a lot as the entire Bitcoin community, that’s how a lot. 

Related Reading | Is This The Reason China Banned Bitcoin Mining? Carvalho’s Mind Blowing Theory

Where is the letter to Congress protesting  Christmas lights, ESG organizations?

Featured Image by Karsten Würth on Unsplash  | Charts by TradingView

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