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Bitcoin mining's reliance on sustainable energy surged 59% in the last year

Bitcoin mining's reliance on sustainable energy surged 59% in the last year

Zuletzt aktualisiert am 22nd Sep 2022
Hinweis
  • Bitcoin mining is increasingly adopting the use of renewable energy resources.
  • That has seen the industry increase its reliance on sustainable energy resources by 59% in 2021.
  • The increasing adoption of green energy is part of the industry's efforts to reduce its carbon footprint.

The crypto market is evolving, and the sustainability of Bitcoin (BTC) mining is a major part of that evolution. According to CryptoMonday's presentation on crypto mining in 2021, BTC mining's reliance on sustainable energy stood at 58.4% that year. That followed a 59% increase from its 2020 figures of 36.8%. In other words, the premier cryptocurrency is cleaning up its act—quite literally.

This move to more sustainable energy sources is part of industry-wide efforts to curb environmental damage and greenhouse gas emissions associated with mining operations. The shift has been driven by rising electricity costs associated with traditional fossil fuels like coal and natural gas and concerns over their long-term viability, given climate change policies being developed around the globe.

CryptoMonday's Jonathan Merry avers, "The BTC industry is taking steps to reduce its carbon footprint. It's doing so by using renewable energy sources and developing new technologies that will help reduce energy consumption. These efforts have been largely self-funded by miners willing to pay a premium for clean power."

The numbers are significant because the electricity consumed by miners has long been a concern for those who care about Bitcoin's environmental footprint. In fact, it's one of the biggest criticisms that critics levy against crypto: that it is not environmentally friendly and should be abandoned as soon as possible.

The case against Bitcoin Mining

BTC relies on the Proof-of-Work consensus algorithm and the SHA-256 hashing function to secure transactions and create new Bitcoins. Unfortunately, the two features give the king crypto a bad rap. Critics insist that they make BTC power-thirsty, elevating BTC’s power consumption and emissions to levels of whole nations.

A significant part of BTC mining also relies on fossil fuels (coal and natural gas). China’s crackdown on cryptocurrencies saw some miners migrate to other crypto-friendly destinations. But unlike in China, where the abundance of hydropower made mining ventures sustainable, these new regions are fossil fuel-rich. Thus an uptick in mining activity has seen an escalation in carbon emissions.

BTC skeptics also point out that BTC mining ventures are reviving decommissioned power plants. However, bringing them back to life is increasing environmental pollution.

How dirty is Bitcoin Mining?

But while Bitcoin was once widely considered among the worst polluters, new data discounts that notion. According to the Bitcoin Mining Council (BMC), BTC mining uses insignificant amounts of energy. As a result, it equally emits negligible amounts of carbon waste.

BMC bases its assertions on a study it conducted on half of the global BTC network. The body asserts that BTC mining consumes 247 Terawatt Hours (TWh) of electricity. In contrast, the world produces 154,750TWh of energy. As such, global BTC mining consumes a paltry 0.16% of the world’s electric power.

Likewise, the activity produces 0.03 billion metric tonnes (BMt) of carbon emissions. Yet the world’s total CO2 emissions amount to 34.8 BMt, making BTC’s discharge a meager 0.085% of the global total. Besides, Bitcoin’s sustainable mining mix of roughly 58% is 10% more than Germany’s, 27% more than the U.S, and nearly 40% more than the globe’s.

BMC affirms that the increase in the adoption of sustainable energy sources has also come with an overall reduction in energy consumption. It insists that energy usage has declined 25% YOY despite the hash rate increasing by 23%. Additionally, mining efficiency has jumped 63%, meaning a lower environmental impact.

Elizabeth Kerr

Elizabeth Kerr

Elizabeth ist eine Finanz-Content-Spezialistin aus Manchester. Zu ihren Spezialgebieten gehören Kryptowährung, Datenanalyse und Finanzregulierung.