Hi, folks. Sherpa here.

Today, I’d like to talk to you about a subject very near & dear to my heart: earth.

I literally spend all of my time there.

I eat there, sleep there, and do other things too, probably, sometimes. If I feel like it. But always there.

And it was even harder on me once I realized that no less than Elon Musk, CEO of Tesla, marrier of emo girls with a borderline creepy age gap, and inventor of the world’s biggest crack lighter suddenly thought that Proof-of-Work mining was destroying the earth.

But…wait. How could this be? “Intro to Economics” had taught me about something called a “profit motive” that seemed to rub up against these accusations.

Let’s go through the basic concept of a for-profit mining business:

You are expending a large amount of initial capital in order to purchase mining equipment. This is a one-time cost, other than maintenance, repair, and replacement. You might also own the facility, or be renting it, so that could be a fixed one-time cost (plus taxes & maintenance) or a revolving monthly cost.

By far, your greatest recurring expense, though – is energy. For a large facility that is well-funded, they’ll just go where the energy is cheapest – and that can often mean hydroelectric. Or it can mean non-renewables, which just to tell you – account for some 76% of the world’s energy usage, on average.

…but what about home miners, hobbyists, and startup mining facilities? If you ask a member of that group, they will tell you in all-too-specific terms exactly how to tweak the minutia of their rigs in order to maximize profit. Very often they’re operating on the slimmest of margins, with so much riding on speculation or eeking out a small but consistent daily return.

Realizing this, even the most basic understanding of a gamified profit motive would tell you that these miners are highly incentivized to find a way to produce their own electricity, with solar being the obvious choice. It would stand to reason, then, that such miners are increasing demand for photovoltaic solar panels, and in turn the increased demand is driving up R&D.

Let’s see if there’s any data to back this up and…

…shit, that was fast.

Five seconds of binging. (fuck google)

As it turns out, since the debut of PoW around 2010, solar generation has increased 43x. And since 2014, the cost of solar panels has dropped by 70%. There is definitely an argument to be made for government tax credits & homeowner usage of them contributing to that, but then you have to realize – the two aren’t mutually exclusive. A homeowner who might’ve been on the fence about solar, but also happens to mine crypto – is no longer on the fence. Period.

Why? Self-interest, same as anything else!

Additionally, even the more conservative statistics put Proof-of-Work mining at an average of 40% renewables. This is despite the fact that a considerable portion of mining takes place in China, who emits roughly 28% of the world’s CO2. This would mean that, at the very least, Proof-of-Work mining is forcing some Chinese businesses to consider the energy they’re using, and hopefully push for R&D into more efficient renewables.

The effects of this absolutely cannot be minimized, no matter your argument regarding energy used today. Because, at the end of the day – environmental arguments are about creating a better tomorrow. That is what we are doing, whether we realize it or not. Cryptoeconomics is about incentivizing the right actions, and disincentivizing the wrong ones.

As it turns out, Satoshi did their job a lot better than we give them credit for.

So the next time some zoomer comes at you with a vitriolic fervor railing on about how Crypto folks are destroying the world, I want you to look them straight in the eyes & say: “Why the fuck would they do that?”, because the answer is, quite obviously: they wouldn’t.

SHERPA OUT