Wind, Nuclear, and Volcanic, how green is Bitcoin now?
Bitcoin is not only in news for its prices, but it is also in news for energy consumption that will now come from green sources.
Bitcoin which has become a center of attraction among crypto users for its adoption has been seen as a culprit that is also responsible for carbon emissions.
Until now, the majority of Bitcoin mining rigs were using fossil fuel coals to generate electricity, but after a huge uproar from environmentalists, Bitcoin miners have now started shifting towards other sources of power.
Statistics from Statista estimate that every year BTC mining operations consume 130 terawatts of energy, which is more than the energy consumption of many countries.
Experts believe that if Bitcoin were a country, it would rank in the top 30 worldwide for energy use. With an estimated environmental burden of over 34 megatons of carbon emissions, BTC could provide electricity to millions of people.
In order to cut carbon emissions, miners have started moving towards sustainable energy.
Global Bitcoin mining uses more renewable energy
According to a report by Bitcoin Mining Council (BMC), the global Bitcoin mining industry’s sustainable electricity mix more than doubled to around 56% during the June quarter, making it one of the most sustainable industries worldwide.
The council is a voluntary and open forum of Bitcoin mining companies and other firms in the industry that aims to promote transparency, share best practices, and educate the public on the benefits of Bitcoin and its mining.
Even though there are no regulations that miners should use green energy, but understanding their responsibility towards society, miners have been shifting to wind, solar and other sources for meeting their energy needs. Some miners even want to use nuclear energy and volcanic power for mining.
El Salvador, which is the world’s first nation accepting Bitcoin as legal tender, has been setting up a Bitcoin mining unit near a volcanic island, where they will be tapping volcanic energy to run mining operations.
The amount of green energy used in Bitcoin mining assumes significance as the world’s biggest cryptocurrency has come under severe criticism during the last three months over its environmental impact.
The BMC report also said, "Based on this data it is estimated that the global mining industry’s sustainable electricity mix had grown to approximately 56%, during Q2 2021, making it one of the most sustainable industries globally."
Consumes only 0.1% of the world’s energy production
Global Bitcoin mining consumes just 0.1% of the world’s energy production. Moreover, while 65% of all energy used to generate and distribute electricity in the U.S. is lost or wasted, only 2.8% of the wastage comes from Bitcoin mining, the report noted.
The percentage of sustainable energy used in global Bitcoin mining is also higher than the percentage in several countries including the U.S, Germany, China, and India, the BMC report adds.
The BMC findings came at the time when a research paper titled ‘Carbon Footprint of Bitcoin’ published in the scientific journal Joule said that carbon dioxide emissions caused by mining were in line with the levels produced by countries like Sri Lanka and Jordan.
This is not the first time, concerns are raised about energy being used to mine Bitcoin, However, a 2019 report of investment firm CoinShares has pointed out two-thirds of the energy used for Bitcoin mining comes from renewable energy.
Commenting on this report, CEO of US-based Arthur Mining Ray Nasser said, "Bitcoin mining has always been mostly hydro anyway. The Mining Council can help the industry organize as an important sector of the economy and change this misleading narrative that mining is essentially bad for the environment."
Increasing renewable energy sources
A number of studies done in recent months have found that an increasing number of Bitcoin miners have moved toward the use of power sources driven primarily by renewable energy.
A study released in October 2020 by Cambridge University revealed that more than 75% of all miners operating today make use of renewable sources to power their day-to-day operations.
The study titled 'the 3rd Global Cryptoasset Benchmarking Study' found that over 39% of the total energy consumed by PoW cryptocurrencies including Bitcoin, Ether (ETH), Bitcoin Cash (BCH), and others comes from renewable energy sources.
This is in contrast to a previous such study by the university, which found that only 28% of the total energy consumed for cryptocurrency mining came from renewable resources. In 2018, 60% of the miners used renewable energy sources as part of their energy mix.
The report further divides miner energy consumption by region, noting that miners from Asia-Pacific, Europe, Latin America, and North America use an almost equal percentage of hydroelectric power as compared to electricity from other sources such as coal, natural gas, wind, and oil.
Various Bitcoin mining companies have been forming partnerships, some have even set up their own renewable energy units dedicated to all mining operations.
With the speed of Bitcoin, miners are moving towards renewable energy in order to cut carbon emissions, very soon, Bitcoin mining will become carbon neutral.
Follow me on Twitter.com/TokenBharat
Disclaimer: This article is only for educational purposes, it is not investment or financial advice on cryptocurrencies.