Climate change has been an ongoing problem everywhere and fingers have been pointed at Bitcoin miners and blaming them for their enormous consumption of energy. However according to Coinshares this is not accurate at all. Coinshares recently released a 19 page report “The Bitcoin Mining Network- Trends, Marginal Creation Cost, Electricity Consumption and Recourses.” It examines and scrutinizes geographical distribution and electricity consumption and sources of the network of Bitcoin mining.
According to the report around 78% of Bitcoin miners actually use renewable energy for their operations. Cryptocurrency miners use renewable energy such as hydropower that makes it “greener than almost every other large scale industry in the world.” They have been able to make this assumption and report by studying China which contributes to 60% of the world’s Bitcoin mining. China’s large scale investment in the energy department has led to operators refusing to accept surplus renewable energy. This is known as curtailment and Chinese miners are using this surplus energy to mine instead of it going to waste. According to Christopher Bendiksen, Samuel Gibbons and Eugene Lim of Coinshares, “Based on historical data on energy mix and locations of cryptocurrency mining operations in China, have shown that contrary to the common narrative, the vast majority of global bitcoin mining capacity is running on renewable energy.”
China is not the only one who is environmentally friendly and thinking of the climatic change. Washington and Oregon in the US are also working in the same direction. Scandinavia which extracts 35% of the total Bitcoin in the world has miners using renewable energy. Also the Northern regions of China do not need to use cooling systems that can immensely heat up and damage chips used.
This was also said back in August 2018 by the nextweb.com. They pointed out how some renewable energy resources like wind and solar energy is difficult to store and sell. Bitcoin miners then use this energy in the form of electricity. Andreas Antonopoulos, cryptocurrency researcher and influencer said, “The energy consumption in mining, I think, is misrepresented. […] What happens when you build a 50 megawatt plant in a place where they only have 15 megawatts of demand? In some cases, if it’s alternative energy, like wind, solar, or hydro, you can’t turn it off or turn it down. You’ve built it, and it will produce, and then what? You’re basically wasting energy.
Now what if, in that environment, you can find a way to turn that energy into an alternative store of value […] by using electricity that would be otherwise wasted. Now, Bitcoin is an environmental subsidy to alternative energy all around the world.”
The Bitcoin mining industry helps in finding solutions to the surplus renewable energy problem by converting this energy to be used as electricity.
Antonopolous gave an example of a VISA card and mining to compare the differences of energy produced: For every time you pull out [a VISA card] and use it to [make] a transaction, you’re not aware of the 100,000 square-foot data center that is churning 100,000 servers to do fraud detection, or clearing […] You’re not aware of the tower offices that are lit 24-hours a day, trading floors, the bank vaults, armored cars, and the diesel trucks […] All of those costs are mostly hidden and they’re enormous.
If the [Bitcoin] system was ten times bigger, with ten times more users, it doesn’t need ten times more mining – what we have is enough. There’s a profit motive that drives it, but it’s a mistake to think that if simply [Bitcoin] goes global, [the energy cost] will also multiply, quite the opposite in fact. Over time, the reward for [Bitcoin] mining decreases, and as a result, it is more likely we will see [the energy cost] gradually taper off and plateau.
It’s time for people to stop criticizing Bitcoin energy usage and start pointing fingers at new and large scale industries that still a use huge amount of non-renewable energy.