Diving through Twitter I found a tweet from CZ, the CEO of Binance, who recommended reading an IMF paper. The International Monetary Fund is not particularly famous for supporting the development of public blockchains, but in its report they do open the door to possible beneficial uses for the environment.
Before talking about possible beneficial uses, they make it clear that for them Bitcoin is wasteful. And the statement is quite clear: a consensus has been reached. Let’s look at the matter in more detail.
To assess the impact of Bitcoin (like blockchain, Bitcoin Core) on energy consumption, it is necessary to understand why such spending is required. Recall that bitcoin BTC is backed by crypto. Your blockchain is a balance sheet that records who has bitcoin in their account. And when a movement is made, the validators must verify that the sender has sufficient capital.
In short: this check is done by competition and you compete trying to decipher a sudoku. To prevent cheating, a proof of work is required rather than a warranty or license to act against if the organization breaks the rules.
Banks and insurance companies must deposit guarantees in the Central Bank or the pertaining institution and that guarantee requires trust. In Bitcoin there are only cryptographic rules not subordinated to identities or guarantees. For that reason, bitcoin as a network is not objectionable and a rogue validator cannot be punished.
Organizations like the IMF live by being able to decide which capital flows should be executed for a “common good”. Instead of serving as collateral for participants in an economy, which is the point of Bitcoin. Bitcoin has never been hacked because its rules work. Because attacking Bitcoin Core would be too expensive precisely because the energy cost of achieving double spending or dishonest behavior would be unaffordable.
Instead of considering whether the energy expenditure of Bitcoin is excessive or acceptable, we should think about the impact that a 51% attack would have on Bitcoin Ethereum Classic suffered a 51% attack because there was no computing power (yes, consuming energy) enough to satisfy the security demand. It happened several times because the crypto consensus (no need to do KYC or buy licenses) failed.
Theory aside, we see progress towards a consensus to use more efficient and environmentally friendly energy sources. Bitcoin mining is non-fungible, not all mined bitcoins are created equal. Some have a certificate verifying the potentially sustainable origin of their energy. But really, if you want to be profitable mining Bitcoin, you should look for the most appropriate energy sources (including regulatory compliance costs, which would be an implicit cost of the negative externalities generated).
Bitcoin consumes a lot of energy because it is the only way to achieve a high level of decentralization, resistance to censorship and security without the use of force. Those who live off censorship clearly feel that they have to find new excuses to maintain their power.