Bitcoin is a global currency system
And consumes alot of energy in order to operate. Although Bitcoin is highly criticized for this fact, the design of the currency system might support a more sustainable economy in the long run by reducing the incentive to consume. Read more about the specific design features of Bitcoin that reduce consumerism below:
Bitcoin and Climate Change
TWh of electricity per year consumed by Bitcoin
TWh consumed annualy by the country of Belgium
The proof-of-work consensus algorithm of the Bitcoin system prefers cybersecurity over transaction costs and environmental effects
“Arguments can also be made that Bitcoin will probably use new and sustainable sources of energy in the future and that its energy consumption is not a major concern.”
The high consumption of electricty is related to the cybersecurity standards put forward by Satoshi Nakamoto
“Blockchain solutions that are able to maintain their data integrity might be valued higher compared to systems that are frequently hacked. Resulting in a situation in which the higher costs of maintenance of Bitcoin might diminish as a factor when its security is considered.“
How Bitcoin reduces consumerism
Bitcoin reduces consumerism by design. The idea is that the amount of transactions that take place within an economy is not necesarily prove that the economy is improving. Because of Bitcoins high transaction costs, consumers are encouraged to lower the amount of economic transactions per month or use alternative channels of payments. This would result in consumers thinking more carefully about spending and consuming. This way Bitcoin is re-thinking economics as the field seems mainly focussed on enlarging the quantity of trades in the marketplace irrespective of the quality of the trades that are available.
This is because of the political weight that is given to time-based metrics like a country’s GDP, in which the value of all the aggregated transactions is combined into one variable. Most fiat currency systems are designed and administred with the idea that more economic transactions is better for the economy, since it highers GDP, while less transactions are bad and signals ‘a recession’.
However, such analysis does not include the quality of trade, up to a point in which consumers could actually be ordering garbage instead of quality and sustainable products. This is the space where Bitcoin innovates and competes with fiat currency systems: by reducing the incentive to spend and consume by its very design, while supporting saving and rational consumer choices. Although Bitcoin consumes alot of energy, the specific design features of Bitcoin might actually reduce overconsumption and consumerism.