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- ⚡ What 99% of people get wrong about crypto
⚡ What 99% of people get wrong about crypto
PLUS: Which banks, cities and states are insolvent?
Alex M.
April 04, 2023
🧙♂️
GM everyone. This is 2036, the crypto newsletter that pays you 💸
Yesterday, we mentioned that Elizabeth Warren is building an anti-crypto army.
Yes, this is real:
She is not alone. People around the world hate crypto for primarily two reasons:
It moves the sovereignty of money away from the state and into the hands of people
Like all things, it consumes energy
We think #1 is a good thing. But #2 is where some clarification is needed. This email will be short and punchy, but you’ll be smarter forever for reading it.
Sounds too good to be true?
Let’s dig in.
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Most bitcoin critics talk about the same thing: bitcoin’s energy consumption.
The World Economic Forum (WEF) even ran a famous headline in 2017 that said:
That was a GREAT prediction, WEF. Good job.
The problem is that most news outlets are a) biased and b) quote the same wrong sources. So they all spit the same BS.
The Univesity of Cambridge has the most accurate record of bitcoin’s energy consumption. You can find it here.
Even at its peak, Cambridge estimates bitcoin consumes under 150 TWh per year.
If that means absolutely nothing to you - the entire world consumes about 176,000 TWh per year.
So that’s less than 0.1% of total energy consumption.
In fact, it’s closer to a rounding error.
Even if bitcoin were to 10-20X from here, it would still only consume about 1% of total energy consumption…
… for a monetary network used by billions of people that guarantees financial sovereignty outside the purview of centralized institutions.
We say that’s a pretty sweet deal.
On top of that, 60% of all energy used for bitcoin mining today comes from renewable sources.
Yet people still shout “BITCOIN USES MORE ENERGY THAN AN ENTIRE COUNTRYYYYY. OMGGGGG”
Bitcoin haters
YES. That’s true. It consumes about as much energy as Venezuela.
But so does:
Google
Youtube
Facebook
Amazon
the cruise industry
Christmas lights
all tumble driers in the US
all the private jets the WEF guys use to fly into their conferences to say we should save the climate
the zinc industry
and basically any other sizable platform or industry
So why don’t we get rid of Christmas lights first, huh. Or actually - the WEF.
On top of that, bitcoin mining can be used to consume energy sources other industries don’t want to.
Like energy from methane-powered generators.
Methane emissions from agriculture and industry are a much bigger problem than we originally thought.
blame this guy
Some industries burn the methane. But around 8% of all methane still flares up into the atmosphere in the process.
Yet most industries can’t actually use the energy from methane-powered generators.
You need:
a portable buyer
that can turn on and off at a moment's notice
and can be located in remote or undesirable locations
… wait, but isn’t that exactly how bitcoin miners operate?
Bingo.
you got it
That’s why more and more climate tech funds are investing in bitcoin mining.
Bitcoin mining is like blood transfusions, bacteria or forest fires - something we initially thought was bad, but is actually good.
Of course, most people already have their beliefs set in stone.
But others are just driven by incentives. And incentives can change.
Like our friend Warren, who maybe doesn’t actually hate crypto - but gets paid by banks that don’t like crypto.
Ahh Warren, I thought you were different!
Btw, you can read the whole story on Elizabeth Warren here.
So next Thanksgiving, when your uncle Jerry tells you Bitcoin is bad for the environment - you’ll know what to say.
May the force be with you.
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