Pompliano told CNBC in an interview that Bitcoin’s energy usage becomes more efficient as it scales and miners increasingly use renewable energy sources.
Anthony “Pomp” Pompliano, founder of Pomp Investments and a well-known Bitcoin podcaster, says much of the debate around Bitcoin’s energy consumption and efficiency misses “two key points” that people often forget.
He made these remarks in an interview on CNBC’s “Squawk Box,” where he briefly addressed concerns about Bitcoin’s volatility and energy use.
Speaking with host Joe Kernen, Pompliano said that when people discuss Bitcoin’s energy consumption they should keep the following points in mind:
Bitcoin becomes more energy-efficient as it scales
Pompliano’s first point highlights a common misconception: many people assume a linear relationship between energy consumption and the growth of a monetary system like the U.S. dollar. In traditional systems, expanding usage typically requires proportionally more energy—more data centers, bank branches, ATMs, and so on.
By contrast, he explained, the Bitcoin blockchain does not follow that same linear pattern. Regardless of how many transactions are included in a block, the energy required to secure the network during block production remains essentially unchanged.
“As it scales, Bitcoin becomes more efficient because you can pack more economic value into each block, whereas in the legacy system you consume more energy as you scale,” he said.
“Important things in the world use energy”
Pompliano also argued there is nothing to apologize for when it comes to Bitcoin’s energy consumption. His view is simple: “important things in the world use energy.”
He pointed to the growing share of renewable energy in Bitcoin mining and said that the industry’s transition to greener energy sources helps drive research and development in the renewable sector.
Before addressing energy use, Pompliano first discussed an important metric: Bitcoin’s volatility.
“The key piece is that the volatility is measured in dollars. If you think of the dollar itself, the dollar is hyper-volatile as well … 40% of all US dollars in circulation have been printed in the last 18-24 months.” says @APompliano. “One #bitcoin still equals one bitcoin.” pic.twitter.com/O5CwpEwGkB
— Squawk Box (@SquawkCNBC) December 27, 2021
He noted Bitcoin’s price experienced two 50% rallies in 2020 and, in the current year, has seen more than six corrections of roughly 20%. There have also been significant price increases, but Pompliano believes the best way to view volatility is relative to the U.S. dollar—the unit in which most price moves are measured.
Viewed this way, he argued, the dollar itself is quite volatile: the U.S. money supply has expanded rapidly, and a large share of dollars in circulation were created in the last 18–24 months. That perspective, he suggested, changes how one interprets Bitcoin’s price swings.