Bitcoin and a lesson in electricity markets – The Property Chronicle
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Bitcoin and a lesson in electricity markets

The Guest Essay

In their desperation to find a reason for why bitcoin is terrible-bad-destructive-awful and morally reprehensible, the crypto-obsessed authors of the Financial Times blog Alphaville – Jemima Kelly, Jamie Powell, Izabella Kaminska – are quickly running out of good choices.

Their latest one is the environmental FUD, a classic in our world of environmentally obsessed elites, where anything remotely associated with The Climate ensures moral supremacy. If all else fails, guilt-by-association will not. So, complain away about the environmental impact from the energy used by the bitcoin network’s nodes and miners. 

What’s so strange about this objection is that, first, the impact is globally small and, second, who cares? Somebody, somewhere, is using energy in ways that you disapprove of (shocking, I know), to which the only reasonable response must be “Yes and?” 

Few free(ish) societies run around policing the use of energy, letting woke Establishment journalists decide on what’s permissible use, what’s harmful and what needs to go. People drive cars, sometimes just because they want to and sometimes just to compete to see who’s fastest. People go on vacation, mostly because they want to. People buy stuff, ride stuff, build stuff, enjoy stuff, almost all of which uses energy and almost never require permission slips from their morally superior overlords. Not yet at least

Throwing bitcoin into the mix somehow changes everything. Somebody, somewhere, is running their specialized hardware to validate the network, when they could have used those components (microprocesses, flash memories, fans, storage facilities) to, I don’t know, run a server hall to host all your incredible Instagram pictures. What is it about bitcoin’s energy requirement that really triggers these people? If you think bitcoin is a terrible payment mechanism, a subpar currency, a destabilising base money or a grand financial fad, those are arguments on their own merits – what’s energy got to do with it?

On a first-pass observation it’s a perfect “gotcha” argument: if you think bitcoin’s value-add is zero, or negative – blog author Kelly happily calls it “a destructive asset class” – any amount of energy would be a waste, a climate nightmare, an environmental catastrophe. After all, we often hear that this monetary scam consumes electricity on a par with small– or medium-sized countries. When The New York Times uses words like “enormous farms” and “endless racks of computers” we know it must be bad. 

As usual when journalists talk about Big Terrible Things, we must dig a little deeper and probe a little more, ask those annoying questions: how much? Is that a lot? Compared to what? 






The Guest Essay

About Joakim Book

Joakim Book is a writer, researcher and editor on all things money, finance and financial history. He holds a masters degree from the University of Oxford and has been a visiting scholar at the American Institute for Economic Research in 2018 and 2019. His work has been featured in the Financial Times, FT Alphaville, Neue Zürcher Zeitung, Svenska Dagbladet, Zero Hedge, The Property Chronicle and many other outlets. He is a regular contributor and co-founder of the Swedish liberty site Cospaia.se, and a frequent writer at CapX, NotesOnLiberty, and HumanProgress.org.

Articles by Joakim Book

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