What Bitcoin's Environmentalist Critics Miss | Opinion

When the telegraph made its mid-1800s debut, Samuel Morse was besieged by critics. Some, including members of Congress, thought his new technology—which transmitted dots and dashes over wires at great distances—was just a clever magician's trick.

Others, like Henry David Thoreau, wondered about technology's value. "We are in great haste to construct a magnetic telegraph from Maine to Texas," he wrote, "but Maine and Texas, it may be, have nothing important to communicate."

Maine and Texas, it turned out, had a fair bit to say to one another. Over time, the telegraph became the forerunner to the telephone and the internet—epoch-defining technologies that ushered in the modern era. Since then, Thoreau's critique is a powerful reminder: What is new will be condemned and critiqued—that is, until it is embraced.

That's an instructive thought as another technology both comes into being and comes under attack: bitcoin. These days, there are no lukewarm opinions about Bitcoin. But the latest strongly-held ones have a particular focus.

"Bitcoin Uses More Electricity Than Many Countries," claimed The New York Times. "Bitcoin consumes 'more electricity than Argentina,'" blared the BBC. And so on.

To dive into these arguments is to discover their hollowness: Yes, Bitcoin miners use energy to mine Bitcoin. This is indisputably true, but what's missing is that miners pay for their energy use. And as with any trade of energy for technology—a plane flight, a car ride, a phone charge—those paying the cost must feel they're getting their money's worth.

With planes, cars and phone batteries, we've accepted the trade-offs—and so we should with Bitcoin. Even in its early innings, the world's premier cryptocurrency has created a trillion dollars in global wealth, brought jobs and investment to rural communities and given millions of people the ability to help secure their families' financial futures.

A visual representation of Bitcoin
A visual representation of the digital cryptocurrency Bitcoin. Chesnot/Getty Images

Many of those achievements are concealed from public view, but so are Bitcoin's environmental benefits. The logic is simple, but also easy to miss: Bitcoin miners will go where energy is affordable, and increasingly, the most affordable energy is renewable. Over 50 percent of the energy powering Bitcoin mining comes from renewable sources—and that percentage is only growing.

In other words, Bitcoin mining has nudged the world toward sustainability, by creating economic incentives for renewable energy production. There are parts of the world—including huge patches of arid desert land—in which the sun shines brightly and the wind blows fiercely, but, without Bitcoin, it is not profitable to capture that energy. Because Bitcoin can be mined anywhere in the world, it helps ensure that tremendous natural power isn't wasted.

The breathless headlines miss all of these facts, but perhaps the errors ought to be expected. They come from a tradition of technophobia that fretted over everything from the telegraph to the light bulb to the car. In their haste to cover Bitcoin miners' energy use, the critics fall into this familiar pattern: letting a technology's short-term effects obscure its long-term benefit and potential.

What does that future hold? Simple: Bitcoin is becoming the world's leading energy-efficient currency. In the near future, it will both ride the wave of sustainable power production and help to spur it along, by aligning miners' self-interest with the world's environmental interest. Ironically, Bitcoin's environmentalist critics may become its fiercest advocates, as the currency promotes the adoption of their favored technologies.

Morse's telegraph confounded the critics in this way, too. Seven years after Thoreau's words, telegraph lines ran coast to coast; five years later, Americans and Europeans were trading dots and dashes. As with many new technologies, the most "important things to communicate" about Bitcoin may not need to be said at all. The technology's success could become its own best defense.

Alexander Leishman is the chief executive officer and co-founder of River Financial.

The views expressed in this article are the writer's own.