Even casual observers can’t avoid the latest conversation in the cryptocurrency space. This time, energy usage is in the spotlight, sparking a lot of controversy in the process.
Bitcoin is notoriously resource-heavy, especially since its massive uptick in price in the past few years. More investors and miners are pilling in with heavy cash inflows, boosting demand and the computational resources required to earn these valuable coins.
Now, everyone from Elon Musk to Janet Yellen has something to say on the topic, and the message is clear: Bitcoin needs to clean up its act in terms of energy use, or else there will be consequences.
Of course, it’s not entirely clear what these consequences are, and critics are curiously quiet on the carbon footprints of, for example, electric car companies, the legacy banking industry, or central banks.
Still, there’s no harm in trying to reduce or even neutralize carbon emissions and create a greener, more sustainable future for Bitcoin. Let’s discuss the current state of Bitcoin energy use and what’s being done to go green with renewable energy.
Bitcoin Energy Use – The Situation
You may have heard some of the facts and figures already, but here are the key statistics on Bitcoin’s energy use and why it’s important for environments and economies.
Electricity Consumption
According to the Cambridge Center for Alternative Finance, global Bitcoin mining operations consume about 0.55% of the world’s total energy output. This is not an insignificant number, and is on par with medium-sized countries in Europe and South America.
“Bitcoin consumes more electricity than Argentina” is the argument we’ve heard time and time again, and it has been amplified in recent months by politicians and activists alike.
While this might seem like a scare tactic, there’s no arguing with facts. However, it’s important to note that electricity consumption is not inherently damaging or dangerous. Instead, the source of this energy is what matters most.
Renewable energy is far safer and more sustainable than coal or natural gas, with a drastically lower carbon footprint. Simply criticizing Bitcoin for carbon emissions does not take into account the fact that many crypto miners are actively moving toward a greener future.
Taking Responsibility
While it’s easy to throw arguments at Bitcoin from every angle, let’s not forget the energy costs of the banking system that vastly eclipse entire crypto industry.
As Cathie Wood of ARK Investment Management pointed out in an interview, the entire Bitcoin ecosystem requires less than 10% of the energy compared to that of the traditional banking system.
Simply look at the energy consumed by credit card companies, retail banks, and other financial institutions to see that comparatively, crypto is just a drop in the bucket.
Besides, when you consider the efficiency of transactions and the true free-market nature of Bitcoin, it appears to be a more naturally eco-friendly option than the cumbersome financial structure currently in place – something also worth considering.
Although it’s important to avoid the blame game when discussing things like energy consumption and carbon emissions, it’s only right to put things in context. This must also be done on a global scale.
North American Bitcoin mining operations are responsible for less than 10% of the total hash power for Bitcoin mining on the planet, with China doing the lion’s share of the work at nearly 70%.
Furthermore, while China does use some renewable energy sources to power its mining rigs, almost 50% of the energy is from coal, which is considered the least green source of all.
This is a point of controversy for climate change activism in general, but it can’t be ignored if an honest conversation is to be had.
Unsurprisingly, criticisms from voices like Elizabeth Warren and Elon Musk fail to address these fundamental truths, leading one to believe that energy consumption is not the real issue at hand here.
Green Bitcoin Initiatives Take Root
Despite the touchy geopolitics of energy and climate change, North American Bitcoin proponents are in eager pursuit of renewable energy for cryptocurrency, making big moves in a few short years.
Here are a few examples of how Bitcoin and other cryptocurrencies are being transitioned into a greener, more sustainable paradigm with lower carbon outputs and higher profits.
Industry Leaders Step Up
Like any major movement in society or business, it always starts with just a few people.
In the case of renewable energy Bitcoin mining, we look to industry leaders who are making clear and transparent commitments to the cause, putting money down and setting the gears in motion.
Argo Blockchain CEO Peter Wall is one of the people leading the charge, working with DMG Blockchain Solutions to launch the first Bitcoin mining pool powered only by clean energy.
In addition, Wall and his team are launching hydro-power data centers in Canada, and wind-powered mining operations in west Texas.
Other companies like Gryphon Digital Mining are using a wide array of solar, wind, hydro, and biomass fuel sources to create a diverse and sustainable infrastructure that will be entirely off-grid and vertically integrated.
These private sector leaders, along with others, are also part of a growing coalition, signatories of the Crypto Climate Accord (CCA).
Following in the footsteps of the Paris Climate Agreement, the CCA has lofty objectives, aiming to bring the entire cryptocurrency industry to renewable energy within 10 years time, and becoming completely carbon-neutral soon thereafter.
The CCA may only have a few signatories at the moment, but with over 50 supporters in total, there is a clear shift taking place in the industry as competition heats up along with pressures from governments and investors.
Renewable Energy and Crypto Unite
When we zoom out, could there be a more perfect pair than cryptocurrency and renewable energy?
These are two technologies that aim to dismantle the inefficiencies of legacy systems, or at least start the shift away from monoliths like fossil fuels and financial institutions.
The future of crypto and green energy go hand in hand, and here’s why.
Freedom and Control
Coordinating crypto mining and renewable energy will put power and profits back in the hands of everyday people and drastically reduce reliance on current systems.
We are already seeing countries like El Salvador embrace Bitcoin as legal tender, and using geothermal energy sources to power their mining operations. This could not be a better combination of factors for an empowered free-market society.
Now that Bitcoin is seeing wider adoption and other altcoins are generating interest as well, the stars are aligned for major leaps forward for technological and societal change thanks to green energy and crypto.
Profit Opportunities
From a business standpoint, ESG Bitcoin mining is also simply the smart move, reducing the amount of energy that must be sourced from the power grid and maximize the efficiency of mining operations.
The simple math shows that low-cost power is a massive competitive advantage for miners as the race heats up to earn the final few remaining Bitcoins in the coming decades.
Renewable Energy Mining is the Future of Crypto
It’s only a matter of time before cryptocurrency and green energy are the status quo. It’s an exciting time to see these movements come together and harmonize for astounding outcomes.
Whether you’re a crypto advocate or climate activist, there is plenty of middle ground to share, and teamwork will be needed to make big strides moving forward.
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