Bitcoin: The Environmentalist’s Salvation 

When New York yet again fell under a yellow fog last month, courtesy of the Canadian wildfires, environmentalists began their regular soapbox crusades.

Critiques of Bitcoin usually center on the power consumed by mining, on the claim that the network is burning valuable resources and straining grids seemingly to indulge finance bros in playing God. What the critics leave out is the comparison to the environmental impact of the fiat currency system we have in place today, and when made honestly, Bitcoin stops looking like an outlier and starts looking like the only monetary system anyone has bothered to meter accurately.

Digiconomist, run by one of Bitcoin's sharpest critics, put the network’s energy expenditure at roughly 155 TWh earlier this year. That puts the network somewhere around half a percent of global electricity supply. How do past and present monetary system compare in environmental impact? Money has never been free. Every monetary system in history has carried a running cost, whether or not anyone had metered it.

Take the gold standard, a Republican and right-wing favorite. From Bretton Woods in 1944 until Nixon suspended dollar convertibility in August 1971, the dollar was tied to a metal that had to be dug out of the ground, crushed, leached, refined, shipped and stored. The World Gold Council puts the gold industry's emissions alone at north of 100 million tonnes of CO2 equivalent a year. In a 2021 report, Galaxy Digital put that at roughly 240 TWh of electricity, or 55% more than Bitcoin's. The gap has narrowed since 2021, but it has not closed. And gold continues to be mined at scale today, energy hungry as ever, and still nobody files gold as a climate emergency.

As for the modern banking system, including all its TradFi data centers, branches, real average annual earnings fell 3.6 percent in the twelve months to June 2022, were still down 1.7 percent across calendar 2022, and only turned positive again in late 2023. That is an entire workforce putting in the same hours for a smaller basket of goods.

Then there is the part that burns actual fuel. Artificially cheap money funds traditional capital projects like manufacturing plants that would never clear an honest inflation rate. These projects consume steel, concrete, diesel and electricity, and a good share of them are abandoned. That’s energy that’s being spent on nothing, and appears in no index anywhere in the world, because nobody tracks the power drawn by things that should not have been built. GDP counts the spending as output and energy statistics count the terawatt hours as consumption, but no series anywhere separates the power that built something worth having from the power that built a stranded asset. 

A currency whose supply cannot be expanded by policy, as with Bitcoin, forces capital to price projects against a fixed standard. A manufacturing project destined to produce little benefit at enormous environmental cost before being abandoned, is far less likely to be funded at all. The efficiency gains from minimizing failed projects contribute to cheaper goods and energy costs. A currency that punishes saving, like the US dollar, shortens everyone's horizon and pulls consumption forward, stripping the economy of efficiencies that a sound monetary system would have preserved, along with the resources those efficiencies would have spared.

It should be made clear that none of these efficiency and re-valuation issues began in 2008. The Bank of Japan launched the world’s first quantitative easing program in March 2001 and ran it for five years, then started again, larger, in 2013.  Twenty-five years on, it is still trying to get out. The balance sheet peaked in early 2024, and two years later the bank had shed 15.6 percent of it, one sixth, with the policy rate at 1.0 percent and holdings still near 90 percent of Japanese GDP. Every year those conditions hold is another year of projects funded at a hurdle rate arbitrarily set by an opaque committee, and another year of steel and diesel spent on them. The Fed simply made the practice famous.

What Bitcoin's energy buys, by contrast, is legible: settlement that cannot be reversed, and an issuance schedule no politically charged committee can vote to change. Its cost is estimated in public, continuously, which is precisely why it makes such an easy target. Meanwhile, gold's extraction cost is buried across a hundred national mining statistics and fiat's is felt in the price of groceries, housing, services, and factories that should never have been built.

The kind of energy matters too. The Cambridge Digital Mining Industry Report of April 2025 put the mining fleet at 52.4 percent zero carbon, being 42.6 percent renewables and 9.8 percent nuclear, with natural gas having displaced coal as the largest fossil source. Miners chase stranded and interruptible power because it is the cheapest thing they can find, and cheap power is usually power nobody else wanted.

Every monetary system runs on energy. The difference is that Bitcoin's consumption is metered, published, priced, and pulled by profit toward the power the world could not otherwise sell – an arguably much more ethical and environmentally-friendly way to operate a monetary system. The dollar's consumption goes into plants that never open, at full market rates, competing against every other buyer on the grid, and it appears in no report because nobody has ever been asked to produce one. The energy critique, aimed properly, is an argument against the dollar. The greener currency is the one that brought its receipts.