While many believe Bitcoin’s carbon footprint underlines the need to tackle the environmental externalities that result from cryptocurrencies. Jack Dorsey recently announced that his company Square Inc. is considering a “Bitcoin mining system based on custom silicon and open source for individuals and businesses worldwide.”
There have been dissenting voices in the past including those of Bill Gates and Elon Musk. They have expressed that Bitcoin’s protocol, environmental aspects, the risk of collusion, and concerns about control must not be ignored in the debate on anticipated benefits.
As debate on the environmental implications of Bitcoin mining continues, one Bitcoin mining facility in upstate New York has turned to Niagara Falls for cleaner power. Well, Dorsey is considering approaching the ecosystem in a different fashion. In a tweet he stated,
“Driving towards clean and efficient energy use is great for Bitcoin’s economics, impact, and scalability. Energy is a system-level problem that requires innovation in silicon, software, and integration. What are the largest opportunities here?”
A report from the Cambridge Centre for Alternative Finance (CCAF) found the United States accounted for more than 35% of the global Bitcoin hashrate, as of August. However, after China’s crackdown on crypto, U.S. has become the largest Bitcoin mining center. Dorsey in this context elaborated why Square is willing to enter an already crowded field. He opined,
“Mining needs to be more efficient. Driving towards clean and efficient energy use is great for Bitcoin’s economics, impact, and scalability. Energy is a system-level problem that requires innovation in silicon, software, and integration. What are the largest opportunities here?”
On-chain crypto analyst Willy Woo was quick to point out power consumption associated with Bitcoin’s blockchain-based mining. He countered,
“If hardware is more efficient, more hardware needs be used to burn electricity. The network incentivises a set $ level of electricity burn for a given price level of BTC. Best to optimise for longevity of hardware cycles to reduce waste.”