Bitcoin mining becomes more environmentally friendly

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The environmental impact of Bitcoin (BTC) mining has always been a controversial topic. On the one hand, critics point out that securing the Bitcoin network requires more energy than the annual electricity consumption of some entire countries. On the other hand, much of the crypto community argues that this is a necessary activity that has allowed the Bitcoin blockchain to remain extremely resilient to external attacks with nearly 99.99% uptime throughout. over more than 14 years of its history.

However, recent developments in the market have provided participants with an opportunity to finally make Bitcoin mining sustainable.

Bitcoin mining doesn’t deserve its bad reputation

Before reviewing the benefits themselves, it is essential to first clarify a few facts about Bitcoin mining. With comparisons to nations’ energy consumption and estimates that a single BTC transaction has a carbon footprint of nearly 820,000 Visa transactions, it’s worth pointing out that this activity is actually zero emissions.

Bitcoin energy consumption, February 2017-July 2023. Source: BitcoinEnergyConsumption.com

Instead, this dirty work is done by the power plants that supply the electricity to the mining rigs. Like households or other business entities, miners only use the electrical infrastructure that exists at a given location.

Since Tesla stopped accepting bitcoin payments in May 2021, citing environmental concerns, many have jumped on the bandwagon to criticize the power consumption of blockchain networks. However, while addressing the high electricity consumption of Bitcoin mining operations is important, it should not be done in a vacuum, as it is not the only energy-intensive industry.

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According to the Bitcoin Mining Council, mining BTC consumes only a fraction of the energy required to power industries, such as construction (3.77%), finance and insurance (4.45%). ), shipping (5.41%) and aviation (5.43%). It even takes almost 2.6 times more electricity to mine gold than to secure the Bitcoin network. And that’s without even mentioning the elimination of electronic devices, as well as the agriculture and livestock industries, which are among those with the largest environmental footprints.

Given the above, it seems unfair to highlight the high electricity consumption of Bitcoin mining farms without mentioning the amount of energy consumed by other industries every day.

Mining is becoming an increasingly sustainable industry

Despite the controversy around the subject, the fact remains that a significant amount of electricity is needed to secure and maintain the Bitcoin network. The question is how to make Bitcoin more sustainable.

One solution would be to combine Bitcoin mining with other business activities in a beneficial way. For example, hydro-cooling mining farms can provide heat to greenhouses, fish farms, buildings and even entire communities. While only eight WhatsMiners are needed to warm a 10,000 square foot greenhouse, increasing water temperature by 10 degrees Celsius via mining rigs can shorten salmon’s growth period by up to three times. in fish farms. Another potential use case includes the development of small hydropower plants to co-consume electricity with local communities.

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The use of Associated Petroleum Gas (APG) to power Bitcoin mining rigs is also key in this area. As you may already know, APG is a by-product of oil drilling. As it is not always interesting for the producers to use it, they regularly burn it on site. This latter process is called gas flaring, which resulted in emissions of 2.7 billion tonnes of CO2 equivalent in 2021, as well as wasted gas in vents and methane leaks.

Instead of wasting this resource, Bitcoin miners can turn APG into energy to power their rigs. By preventing flaring, this activity can have a positive effect on the environment. In fact, a report found that Bitcoin mining can reduce the percentage of gas flared by each oil producer by 80%.

At the same time, the researchers also found that it was by far the most cost-effective way to reduce emissions, exceeding the values ​​of wind and solar by several times. This is probably why many junior oil and gas companies in the US are mining BTC with flared gas.

The Road to a Greener Bitcoin

As Bitcoin miners have migrated to countries where they have access to cheaper energy in the form of renewables, this has presented market participants with an opportunity to increase the sustainability of the industry.

With initiatives like preventing gas flaring and combining it with other business activities, the long-term goal is to make Bitcoin mining environmentally friendly. Ideally, every industry should become as sustainable as possible while minimizing harm to the environment. Making the effort to make this possible is what it means to be a responsible market player.

Bitcoin mining is already doing a lot to transform the energy sector because miners are very flexible in their electricity consumption. And as the sustainability of this industry improves in the coming years, it will attract many large-scale investors who want to invest in environmentally friendly businesses.

Didar Bekbauov is the CEO of Bitcoin mining company Xive, which he co-founded in 2019. He was previously a managing partner at Hive Mining. He holds an undergraduate degree from the Kazakh-British Technical University and a master’s degree in financial management from Robert Gordon University.

This article is for general informational purposes and is not intended to be and should not be considered legal or investment advice. The views, thoughts and opinions expressed herein are the sole authors and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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