The fiercely contested bitcoin energy debate has gained momentum amid growing concerns about the environmental impact of mining cryptocurrencies. The ‘bitcoin gold rush’ is getting people talking about the environmental impact and some tech leaders say that cryptocurrency could be the catalyst for a renewable energy revolution.
At a recent virtual panel discussion hosted by the Crypto Council for Innovation, Tesla CEO Elon Musk said “When there’s confirmation of reasonable (~50%) clean energy usage by miners with a positive future trend, Tesla will resume allowing bitcoin transactions.” Twitter CEO Jack Dorsey, who also participated in the virtual panel, argued that bitcoin can incentivise the transition to renewable energy.
A new report from the Bitcoin Mining Council counters bitcoin mining concerns and offers a more optimistic outlook.
- Bitcoin mining uses a comparatively small amount of energy when compared to other mainstream energy uses.
- Bitcoin advocates are adamant that bitcoin mining will inspire more renewable energy.
- The crypto and tech industries are creating bitcoin collectives to address environmental concerns about mining.
Bitcoin mining energy comparisons
Crypto firm Galaxy Digital estimates that traditional banking uses 260 TWh a year, with bitcoin coming in at 114 TWh. As the currency hit record prices last year, its energy consumption grew, with the Bitcoin Mining Report estimating global bitcoin mining being equivalent to 189 Terawatt-hour (TWh). While there has been an increase in bitcoin’s energy use, its overall usage is fractional compared to other mainstream energy uses. By global comparison, bitcoin mining uses only 0.1% of the world’s total energy.
Bitcoin mining and renewable energy
As bitcoin mining comes under scrutiny, its biggest advocates say it could propel the overall shift towards renewable energy. Every industry is assessing its environmental impact, and cryptocurrencies are no different. Pressure from tech leaders and calls for sustainability are promoting change and holding companies accountable.
The US is a top location for bitcoin mining and is progressively using more renewable energy, with some estimating that half of US bitcoin mining relies on sustainable energy resources. The cost of renewable energy has fallen significantly over the last decade and is now undercutting fossil fuels according to a recent report by the International Renewable Energy Agency (IRENA). “Today, renewables are the cheapest source of power,” commented IRENA’s Director-General Francesco La Camera. Environmentalists hope that the economic benefits of renewable technologies will encourage more sustainability for bitcoin mining providers.
Bitcoin mining collectives take off
With the likes of Musk ditching bitcoin until it becomes more environmentally friendly, other tech entrepreneurs are taking the leap to make bitcoin greener. Jack Dorsey’s Square and the bitcoin infrastructure company Blockstream announced plans to create a solar-powered bitcoin mining facility. Dorsey, who is a vocal bitcoin supporter, says that bitcoin can incentivise more dependence on wind and solar power. While Musk appeared to agree with Dorsey in a tweet, many more voices are speaking out on the issue of sustainability in decentralised finance.
Several crypto groups are emerging and want to usher bitcoin mining into a greener future. The Bitcoin Mining Council officially launched this June and aims to counter backlash about bitcoin’s environmental impact and energy consumption.
The Crypto Climate Accord is another crypto non-profit that also launched in June and is inspired by the Paris Climate Agreement. The Accord aims to eliminate all carbon emissions from the crypto industry by 2030 and has over 140 organisations supporting its mission.
The emergence of these collectives speaks to the overall desire for bitcoin mining to become more sustainable, but the transition towards clean technologies is by no means overnight. As bitcoin prices reach record highs and plunge dramatically, the technological ecosystem that keeps it running will continue to mature, hopefully with sustainability at its core. The growing reliance on environmentally-friendly technologies suggests bitcoin’s gold rush is also looking very green.