CoinGeek’s Becky Liggero spoke to SBI Holdings Crypto Dept.’s Jerry Chan on his ideas to make crypto mining more productive and sustainable.
With Bitcoin being a relatively new phenomenon, it’s not surprising that many aspects of it are not fully answered or addressed. One such aspect, as pointed out by Jerry Chan, head of Digital Assets at SBI Holdings Crypto Dept., is power usage in mining coins. According to him, comparisons of mining output to specific countries’ total output are misleading.
“Bitcoin is supposed to be a financial global ledger. Potentially, it could be a replacement for a global financial system. So we should really be comparing it to the power that the existing financial system is using, right? Not just like power for keeping the lights on in people’s houses, which means all the servers, all the branches, all the offices, all the ATMs that operate around the world,” he explained.
Chan estimates global mining power to be equal or somewhat less than electricity use of financial institutions worldwide, yet believes more could be done. “[W]hat if Bitcoin power use can also be used to grow and fuel other parts of the economy, which is what people haven’t been looking at enough,” he asked. By posing this question, Bitcoin mining may “actually grow the economy in ways they couldn’t have done if these machines didn’t use this much power and create this much heat.”
Such endeavors are not confined to the Earth either. As Chan sees it, missions to install mining facilities in the moon, or Mars, could be self-funded. “[A]ll it takes is a couple of robot drones and a couple of 3D printers, and pretty soon the technology will be there where these things can start making solar panels themselves,” he said, encouraged by privately funded initiatives such as SpaceX, which were not around just a few years back.
People are just beginning to imagine the possibilities, because blockchain is a new technology, and much of the focus has been on price movements rather than real-world application. “[T]here are so many positive externalities [with] Bitcoin mining and its energy use. It’s just that people haven’t been thinking about it, because people have been too preoccupied about Bitcoin being a stock that you can buy and you’re going to get rich. And of course, if you think of it like that, then all of this extra stuff that it does and all the power it uses is a complete waste,” he said.
Chan acknowledged the importance of investors in directing funds to productive ventures, but stressed the limitations of such thinking.
“I wouldn’t say [focus on price] is the wrong way, but it’s unhealthy if that’s the only way. I think if everybody sees this as a way to get rich, what you’re effectively building is just a very large bubble or a Ponzi scheme,” he said.
Chan added, “[T]his is quite honestly the first time since 2013 that I feel very, very positive. I feel like a five-year weight has been lifted from my shoulders, because for the first time I’m hearing real businesses which are starting to talk about how to use the Bitcoin ledger the way it was meant to be used.”
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