A rising Bitcoin price goes hand in hand with increasing environmental impact, believes economist Alex de Vries.
The founder of Digiconomist, Alex de Vries, predicts that the cost of mining a bitcoin will increase to the price of a bitcoin in the long run. de Vries refers to economic theory, which says that competition will push down profits over time.
de Vries, whose website examines the consequences of digital trends from an economic point of view, is certain: in this scenario, competitive mining causes further environmental damage as more carbon dioxide is produced.
In addition, the impact of a $ 500, 000 bitcoin would exacerbate the problem and lead to an environmental disaster.
But since others claim that the BTC network is already mostly powered by renewable energy-is this report just another FUD attempt to disrupt the Bitcoin rally?
Bitcoin recovers from FUD
Since bottoming out at $29,800 in mid-July, Bitcoin has recovered strongly. This is all the more true for the past week, as the bulls hope to reach $ 50,000 – an important psychological price level.
With that, talk of the crypto winter has all but disappeared, and the prospect of a $ 100,000 year-end price seems like a real possibility.
Indeed, Bitcoin’s upward moves have recently triggered a wave of high-flying price predictions. Including a bullish year-end target from on-chain analyst Willy Woo. Up to Dan Hero’s extreme price prediction of $ 9.5 million per token at some point in the future.
However, should the Bitcoin price approach these sky-high levels, de Vries and others fear that the network’s carbon footprint will be catastrophic.
The Environmental Cost of a Booming BTC Price
It follows that the laws of supply and demand will push up the price of BTC, which will increase mining revenues and profitability as BTC becomes increasingly scarce over time.
This in turn will attract more miners to join the network, increasing the difficulty of mining and making an already competitive venture even more competitive and therefore less profitable in the long term.
According to calculations by de Vries, the dynamics associated with a Bitcoin price of $ 500,000 would emit 617 million tons of CO2 per year-an amount that far exceeds most countries.
“This amount exceeds the footprint of Australia by 56%, Brazil by 40%, South Africa by 40% and Mexico by 33%. Bitcoin mining would emit 70% more carbon gases annually than the UK’s 352 million tonnes.”
As serious as that may seem, de Vrie’s claims raise questions. For example, a 2019 study by CoinShares estimates that nearly three-quarters of the Bitcoin network is powered by renewable energy.
If this is the case, it would largely refute de Vries’ claims of a carbon catastrophe.
Text credit: Cryptoslate
Last updated on August 18, 2021
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