The Bitcoin network has a bad reputation as an energy consumer. There is a strong belief that miners use a huge amount of energy to generate new blocks. Until now, the energy consumption of the first cryptocurrency didn’t affect its development in any way. But more and more crypto market players are concerned about the high electricity consumption of the blockchain network.
So, Tesla temporarily suspended the ability to buy electric cars for Bitcoin – a month and a half after the launch of this payment method. The company attributed this to the rapid growth in the use of fossil fuels for Bitcoin mining. At the same time, Tesla itself has $ 2.5 billion worth of Bitcoin, but the automaker has promised not to sell them.
In a statement, Tesla points out that coal has the worst emissions of any other fuel. According to the Cambridge Bitcoin Electricity Consumption Index, this cryptocurrency uses more energy than some countries, such as Sweden and Malaysia.
The irony, however, is that Tesla’s electric vehicles use a lot of energy, and are powered by the same energy used in coal-fired machines to mine BTC. For example, if Elon Musk builds and sells 10 million cars, they, in principle, will consume a lot of energy.
It’s the same with Bitcoin. The only way to mine Bitcoin is by mining. Users run farm computers that constantly solve complex math problems in order to create new blocks on the blockchain. Miners receive bitcoins as a reward. Because computers run almost nonstop, they consume a lot of electricity. However, we can conclude that Bitcoin is not responsible for dirty energy – people are.
Miners need renewable energy
Bitcoin investors are trying to deny the environmental harm of cryptocurrency. According to them, miners are interested in using renewable energy sources, as this can reduce the cost of mining Bitcoin.
Thus, it is obvious that miners will continue to look for the cheapest electricity – mainly from renewable energy sources.
However, one must also take into account the fact that the production of renewable energy sources is extremely unstable. So, it is not ideal as a permanent form of energy. Therefore, if we want to leave behind the cheapest and most stable source of energy in favor of the ecological situation on our planet, many will have to try hard.
Research warns that the same factors that pushed miners to use clean energy could one day lead them to return to energy from fossil fuels. For example, more than half of all military-technical cooperation is produced in the Chinese province of Sichuan. Which has a developed hydropower industry. But due to the decrease in the high flow of rivers, hydroelectric power plants already generate 30% less energy during the off-season. Also, many regions in China where mining centers concentrated depend on the coal-fired power industry. Therefore, some researchers believe that renewable energy will not solve the problem of Bitcoin’s electricity consumption.
Bitcoin has every chance to fit into the “green” economy
Bitcoin miners are nomads. They follow the cheapest energy source. Most likely, they will continue to operate from renewable energy sources in the future. According to CBECI, there will be enough hydropower to power the entire Bitcoin network for 70 years, wind and solar energy for 24 years, and biofuel and waste energy for 10 years.
Much will depend on the actions of local authorities. So far, the most striking example is the activities of the administration of the city of Missoula in Montana, where officials banned the extraction of bitcoins from “dirty” energy and demanded that all future mining farms build their own renewable energy sources.