German Public TV about Bitcoin and Climate Change

Germany has a system of television where people are forced to pay for public channels even if they are not watching. All citizens are required to pay a tax for some channels even if they have no interest in anything they produce.

The German Federal Constitutional Court sees this tax as constitutional, because they assert that it is not a tax but a fee for providing a useful service. They go so far that the potential to watch these programs is useful even for people who don’t own a television set in the first place.

This is the equivalent of producing a state sponsored magazine with tax funds and send it to every citizen and then telling them it is “potentially useful” even to people who won’t read it. I don’t approve of that. The television tax should be abolished and the state sponsored media should be required to compete in the market place like everybody else.

I am bringing this up because one of the tax funded channels just aired a critical report on Bitcoin’s energy usage.

This is a legitimate question. Hal Finney, who is one of the most likely candidates for having been Satoshi, brought it up in his third tweet about Bitcoin way back in 2009.

The report then says that a change to proof of stake discussed for one of the altcoins may be the solution. I doubt that. Proof of work has been proved to work reliably for over 10 years. Proof of stake will be unable to provide the same thing, trustless and reliable security. The fact that Bitcoin uses a lot of energy is a good thing for providing security. The idea that you could get the same security without investing the same energy is dreaming of a free lunch.

Anyway, I share the interest shown by Hal Finney in 2009 and by the recent state sponsored media report on what to do about the CO2 emissions caused by the Bitcoin network. This may become a major issue in Germany where the Green party is the strongest force now in polls running up to the elections later next year.

And I actually share the concern about the climate crisis. If Bitcoin is contributing to that crisis, that would be a major point against supporting it.

You can forget about Bitcoin changing to proof of stake. If it did, it would cease to provide the trustless security it does now. This is not just a “potentially useful” service like the television tax funded media, but a crucial element of 21st Century finance, the base layer everything else will depend on.

So we need to face the fact that Bitcoin uses energy. And a lot of it too.

One way to mitigate the climate impact is to use renewable sources, especially those not yet able to deliver to consumption centers for lack of power lines. With big demand potentially available in any desert area, Bitcoin may help with accelerating the transition to renewable energy

But the real challenge is to build a system of allocating production rights for fossil fuel. Do what OPEC has tried to do for decades, but with everyone (not just sovereign states) at the table.

If it can be shown that oil production can be set on a rapidly decreasing schedule like bitcoin production, that would actually solve the climate crisis. Any oil that is left in the ground will not be burned, no matter what kind of reduction targets are or are not adopted in some place or other.

This is the simple solution to the climate crisis. It is so easy. There are only a few pieces missing in the puzzle.

One of those pieces is Bitcoin. There is no way to build a trustless secure system like that without a solid foundation. A base layer that is decentralized and trustless.

So far from Bitcoin being the problem for the climate, it will be a central piece of the solution, if we are lucky.

Published by kflenz

Professor at Aoyama Gakuin University, Tokyo. Author of Lenz Blog (since 2003, lenzblog.com).

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: