Green Bitcoin Mining
By
Mining digital money is often blamed
for harming nature. In this article, we look at the features of
environmentally-friendly mining, find out where greener methods are already
used and what their prospects are. Bitcoin (BTC) mining has been all over the news lately, and not
in a good light for the most part. This essential process of obtaining new
bitcoins has stirred public interest. This is quite understandable, considering
the incredible amounts of energy it requires. Some studies find that bitcoin
mining consumes as much electricity annually as Argentina!
Some institutional investors like Tesla backed down on their decision to start
accepting bitcoin
as a method of payment. It seems that investors are valuing the environment
more than their bank balance. They are willing to take a step back until crypto
mining becomes more eco-friendly.
Things are, however, starting to change. Increased interest in
providing green bitcoin mining has been rising worldwide. Countries are
scrambling to develop alternatives and provide a more sustainable method of
supplying energy for green mining.
Bitcoin’s mining mechanism is considered to be the network’s
foundation. It provides three essential functions. - Creating new bitcoins - Confirming transactions on the network. - Securing the Bitcoin blockchain from malicious attacks. In a nutshell, bitcoin miners use powerful computers (mining
rigs) to compete at solving increasingly complex mathematical puzzles. They
reach a consensus, discover new transaction blocks and add them to the
blockchain.
To function, mining rigs require enormous amounts of
electricity. This is the trade-off for acquiring new bitcoins as a reward.
However, the amount of power used is alarming the public.
To put it in numbers, around 1,800 KWh are needed for a single
transaction on the Bitcoin blockchain. This costs around $200. Mining one BTC
costs between $5,000 and $10,000, depending on the region and the price of
electricity. For example, the monthly electricity bill of one of the largest
mining operations in Dalian, China, amounted to $1,170,000.
And because the popularity of bitcoin and other cryptocurrencies
is increasing, these numbers are expected to go up. As more miners join the
competition, the algorithm increases in difficulty and more electricity is
needed.
That said, mining companies all around the world are seriously
considering eco-friendly alternatives. The answer lies in sustainable energy
sources, including: - Wind. Wind
power is becoming commonplace around the world. Turbines convert wind power
into clean electricity. - Geothermal. Countries
with high volcanic activity can turn to geothermal energy production. This
involves harnessing the heat under the surface of the earth to produce
renewable sources of power. - Solar. Sunlight
is the most abundant energy source on the planet. Countries with high numbers
of sunny days prefer to adopt solar panel farms for their energy production.
This method can be used by households because it’s cheap and easy to maintain. - Hydro.
Finally, harnessing the power of running water is a popular method of producing
green electricity. Hydro plants are even more reliable than wind or solar
energy sources, especially if they’re using tidal changes. There are already some real-world examples that follow this
environmentally-friendly mining trend. Below are some countries where
sustainable energy is actively being used to decrease the carbon footprint of
bitcoin mining.
Iceland was one of the first European countries to adopt
cryptocurrency mining on a large scale. Landsvirkjun, the Icelandic
governmental power agency, focuses entirely on geothermal and hydroelectric
power generation.
Because of its geographical position, sustainable mining is
cheap and effective in Iceland. As a result, Iceland is one of the most
prolific eco-friendly mining countries in the world, with almost 8% of bitcoin
being mined there.
Canada is another bitcoin mining hub where sustainable energy
is increasingly adopted. Multiple carbon-neutral mining companies are emerging
in the country, and most mining facilities usually adopt a 100% renewable
approach.
This is the case of Bitfarms, a company that mines
approximately 1.5% of all the bitcoin in the world and uses 99% of renewables
to effectively achieve this. More recently, Canada Computational Unlimited Corp, a green
crypto mining firm, was recently listed publicly on the TS exchange in Toronto.
This shows institutional interest in such mining facilities.
Japan has been encouraging green bitcoin mining for almost half
a decade now. To incentivise mining facilities, some Japanese prefectures offer
rebates on electricity bills if farms agree to use renewable energy sources.
This is the case of the city of Kazuno. Miners there were
invited as early as 2017 to share the town’s geothermal and hydropower grids.
Even after the recent mining crackdown, China still remains the
world’s leading bitcoin mining country. It holds more than 40% of the entire
global production. And with just below half of mining operations still using
coal plants to power their functions, there’s cause for concern.
However, the China Sustainable Energy Program (CSEP) is
actively working at providing an efficient power grid. This should allow miners
to connect to renewable power sources in the future and access cheap and
efficient power supply.
Bitcoin is a worldwide phenomenon. And while power consumption
for its mining cannot be avoided, it can have some positive shifts in the
long-term.
As China continues to crack down on its mining facilities, we
can expect bitcoin miners to migrate to other countries where renewable energy
is more prevalent. This can have a positive outcome on these smaller countries’
economies. It could also motivate governments to invest in sustainable power
grids, which has been the case in El Salvador.
Moreover, the increased demand for cryptocurrencies can drive
economies all around the world to move towards adopting mining as a lucrative
activity. The end result could well be a globalized transition towards
environmentally-friendly power production.
Cryptocurrency mining has a major impact on the environment and
a considerable carbon footprint. However, efforts are being made all around the
world to transform this industry and make it more sustainable.
With the demand for bitcoin continuously rising, governments
are adopting policies that will benefit humanity in the long-term. Bitcoin
mining might be one of the factors that actively contribute to this
transformation. Shift to ecological mining
How does bitcoin mining work?
Ecological mining methods
World experience
Iceland
Canada
Japan
China
Perspectives
Conclusion
