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- 1 The Bitcoin mining industry has become an avid user of sustainable energy.
- 2 New study reveals the Bitcoin network currently uses nearly 52.6% zero-emission energy.
- 3 Reduction in the emission intensity of Bitcoin has also been highlighted.
Despite its raging popularity, Bitcoin has lately been under scrutiny of environmentalists due to its energy-intensive mining process. It is well-known that mining of crypto assets requires substantial electricity usage. However, it is less known that the mining industry has made advancements to embrace sustainable energy for its operations.
A new research has established that the Bitcoin mining industry has become the highest user of sustainable energy. The data acquired from a recently developed analytic model revealed roughly 52.6% of the electric power used in the Bitcoin network is drawn from renewable sources.
Bitcoin Mining’s Impact on Environment
As the world’s largest blockchain network by market capitalization, Bitcoin consumes enormous amounts of energy to power its network. This high power consumption is majorly triggered by its complex cryptographic protocol, which employs Proof-of-Work (PoW) consensus.
In the PoW mining system, validation of new transactions and minting of coins are achieved by updating new blocks on the ledger. For creating new blocks, the Bitcoin network engages the miners in a fierce competition to solve complex cryptographic puzzles.
To arrive at the solution (a 64-digit hexadecimal solution called hash) first, miners use advanced computing hardware capable of producing billions of hashes per second. The process demands excessive amounts of electric power and is also computationally-intensive. The miner who wins this numeric guessing game adds the new block to the network and is rewarded with coins.
More computational power corresponds to more chances of winning. For this reason, miners all across the world have formed mining pools where they combine the hashing power of mining hardwares to generate more guesses. This increases the power demand to run these facilities, and sometimes, can even overload the local infrastructure.
As per the Cambridge Bitcoin Electricity Consumption Index (CBECI), the annualized power consumption of Bitcoin was estimated to be roughly 129 terawatt-hours (TWh). To put things into perspective, Bitcoin’s power demand exceeds the electric energy consumed by some countries, including Norway (approximately 124 TWh/year).
The electricity generation process for Bitcoin mining also emits tons of greenhouse gasses (GHG) into the environment. A renowned research center, Cambridge Centre for Alternative Finance (CCAF), released a report on the GHG emission of the Bitcoin network in September 2022. In the report, the annualized gas emissions of BItcoin was found to be nearly 48 Million tonnes of CO2 equivalent (MtCO2e), around 0.10% of the global GHG emissions.
Bitcoin’s Shift to a Greener Future
While the power consumption is undeniably high, Bitcoin has been striving to reduce its share in the global energy crisis and climate change. Miners have been opting out ways to make the hardware more efficient, but progress is still quite slow. Also, the community has been steering towards clean energy sources (like solar, wind) to power their mining operations.
According to the data shown in a recent report, the Bitcoin mining sector has been recognized as the highest user of clean energy. The analysis report was presented by a researcher and former climate activist, Daniel Batten, on his website. As per the analysis, between July 2019 and June 2023, the Bitcoin mining industry has seen an incredible upsurge in its sustainable energy mix up to nearly 52.6%.
Per the latest Q2 2022 report by the Bitcoin Mining Council (BMC), Bitcoin uses roughly 59.4% zero-emission power sources. Contrastingly, the September 2022 CCAF report showed it to be only 37.6%. The analyst devised a new model to understand the large difference in the Bitcoin’s energy consumption data provided in these reports.
The model, Bitcoin Energy and Emissions Sustainability Tracker (BEEST), precisely determines how much green energy is powering Bitcoin’s mining. It includes factors the CCAF has acknowledged to exclude in its report.
One such key parameter is off-grid mining, a mining process that uses non-traditional energy sources to decrease the GHG emissions. Other factors including flare-gas and vent–gas mining, off-grid mixed mining, current geographical hashrate, Marathon renewable migration, etc., have also been accounted for in the BEEST model.
By including all the prominent factors, the model depicts sustainable energy sources having a staggering share of 52.6% in Bitcoin’s mining process. Another finding of the report states, every year, the Bitcoin network uses around 4.49% more zero-emission power. The analysis also debunked the inference of the CCAF report that the Bitcoin industry primarily uses coal as the power source.
As per the data, Bitcoin achieved more than 38% increment in its sustainability energy mix during the last four years as compared to other global industries (e.g., banking, gold). Hence, Bitcoin currently ranks as the highest user of sustainable energy with other sectors trailing behind. The study also unveiled Bitcoin showing a remarkable reduction in its GHG emission intensity from beyond 500 g/kWh (July 2021) to nearly 296 g/kWh (June 2023).
Bottom Line
Amidst the growing concerns of regulators regarding its power consumption, Bitcoin recently emerged as the lead supporter of sustainable energy. As per a new study, the Bitcoin mining industry currently uses nearly 52.6% zero-emission energy sources. Moreover, during the last four years, its emission intensity has also decreased profoundly. It can be safely concluded from these recent findings that Bitcoin mining is taking responsible steps towards a sustainable future.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
