April 22 is Earth Day and with environmental sustainability one of the key topics in the global debate surrounding Bitcoin mining, analysts say the industry has begun to naturally gravitate towards cleaner and cheaper energy sources.
According to a January report by the Bitcoin Mining Council, by Q4 2021, the global Bitcoin mining industry ran on an estimated 58.5% renewable energy.
The preference for clean energy is due to a combination of environmental conscientiousness, political pressures, and an eye on the bottom line. It’s resulting in a sea change that could have ripple effects that extend well beyond Bitcoin (BTC) mining onto power grid systems around the world.
Bitcoin miners in Norway are cleaner than almost anywhere else on the planet thanks to the country’s access to hydropower and other renewables. In fact, 100% of Norway’s electricity is generated from renewable energy.
Of Norway’s 157 Terrawatt hours (TWh) of power produced per year, 88% is from hydroelectric, with wind and thermal force making up the remainder.
Miners use that renewable energy to produce about 1% of the total Bitcoin hashrate according to data from blockchain research firm CoinShares.
Mas Nakachi is Managing Director of Miami-based XBTO Group’s Bitcoin mining operation XBTO. Founded in 2015, XBTO’s mining operation takes in upwards of $25 million per year and claims to be completely powered by renewable energy sources.
He believes “hydropower is one of the most reliable renewable energy sources available to us.”
Wind power depends on the weather and solar power depends on daylight, but rivers can flow all day every day — and in various locales water can be pumped uphill during off peak periods as a way to store excess energy to run generators when needed. Nakachi told Cointelegraph that:
“Harnessing hydroelectric power has remained an effective mechanism to maintain the most efficient mining possible.”
Whereas a Feb. study published in the Energy Research & Social Science journal concluded “cryptocurrency is unsustainable by design,” Nakachi believes there is a simple path for mining operations to develop both an economically and environmentally sustainable model:
“Prioritizing some form of clean energy to power the majority of operations is, in the long term, a sustainable model for successful mining operations.”
As reported by Cointelegraph, another option being explored in Texas is the utilization of flexible data centers which can switch from the public grid to temporarily generating its own clean energy from dedicated energy generators to relieve stress on the grid during periods of high retail demand.
Related: Marathon Digital moves Montana BTC mine to pursue carbon neutrality
Tech entrepreneur and self-proclaimed environmentalist Daniel Batten described a multi-pronged way in which the Bitcoin mining industry is creating positive change on the April 22 podcast from Brave New Coin. Batten argued that Bitcoin mining incentivizes building renewable energy plants and helps decarbonize power grids.
BREAKING: #BTC Mining can drive us to 70% renewables-based energy consumption by 2030.
To say “#BTC mining is good for the environment” is like saying “the sun is warm”: a massive understatement. #BTCmining is our unexpected superhero. Here’s how.https://t.co/Arl1zZXTY6 pic.twitter.com/AleegYAbwM
— Daniel Batten (@DSBatten) April 13, 2022
Batten believes Bitcoin mining drives increased demand for electricity and therefore investments in renewable energy plants. Mining is suited to intermittent power sources and it can be easily moved to far flung locales to take advantage of excess generation of renewable electricity.
The only problem that Batten sees is that the industry may not be big enough to incentivize all the renewable energy required:
“My only real concern is ‘Is Bitcoin mining requiring enough electricity to help us build up that grid to the extent we need to?’”