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Sunday, June 20, 2021

Because Bill Gates has openly taken sides against bitcoin

The US billionaire warns against cryptocurrencies: “They are a danger”. Yeah, but in what sense?

Elon Musk likes them, and a lot too, but not Bill Gates. The financial world is winking at bitcoins and cryptocurrencies, appreciating the exponential increase in value recorded over the last few years. Visa is planning to allow its circuit to accept payments in electronic currencies as well as Morgan Stanley which will allow customers to invest in three bitcoin-based funds; if we add to this the investment boom as in the case of crypto art, electronic currencies are ready to conquer a leading role for the future. Yet despite everything, Bill Gates has taken sides against cryptocurrencies, dismissing them as harmful to the environment. The Microsoft founder believes that digital currency is the cause of an excessive release of carbon dioxide and, as such, deplorable because it pollutes the planet.

According to the analysis of the former richest man in the world, bitcoins ” use more electricity per transaction than any other payment method known to mankind”. Making a comparison, each bitcoin transaction is equivalent – in terms of environmental pollution – to 750 thousand payments by credit card. In short, we know that this type of currency has a very high environmental cost, due to the need to track every single transaction via blockchain. that is, in a sort of certified shared register that guarantees the transparency and security of payment but requiring an abnormal waste of energy in terms of archiving and maintenance.

Not only that, even “creating” bitcoins involves an enormous energy effort: precisely because the transaction system is so complex, so many calculations are required to encrypt and validate an operation. Thus, those who “lend” their computer to make it available for the necessary calculation work are rewarded with a fraction of bitcoin: the more computers you use, the more you are rewarded and the more you accumulate. A vicious circle has led to the creation of veritable cryptocurrency mines in China capable of consuming the same energy that an entire nation would require. It is, therefore, no coincidence that the energy consumption necessary to make bitcoins work is roughly the same as in all of Argentina.

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And why is it a problem to consume electricity? Because it depends on how we produce this type of energy: in the case of China – but the problem can extend a little around the world – most of the electricity comes from fossil fuels such as coal. So, if we connect the dots, creating and paying in bitcoin is equivalent to making the most of coal-fired power plants by contributing to environmental pollution. In practice, it is the same accusation that is being leveled at the electric car: until we can find renewable energy sources that will easily recharge the batteries by declaring ourselves independent from fossil fuels, it will be difficult to consider them with low environmental impact.

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