Revenue Constraints Will Drive Bitcoin Mining To Sustainability

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Bitcoin mining alone will not save the planet, but it is a valuable tool for managing some of the challenges of the energy transition. Most importantly in the context of climate change, bitcoin is essential for preserving freedom and freedom when increasing climate pressure destabilizes nations.

This story is part of CoinDesk’s 2023 Mining Week, sponsored by Foundry. Margot Paez is a Fellow of the Bitcoin Policy Institute, Head of Sustainability at Block Green, and a Bitcoin Sustainability and Mining Consultant.

Let’s start with what bitcoin mining won’t be able to do. Bitcoin mining alone will not push global warming beyond two degrees Celsius above pre-industrial levels. Bitcoin mining, based on CBECI estimates, accounts for around 0.14% of total global emissions. These are just a few drops in a bucket of greenhouse gas emissions.

In reality, even if we banned bitcoin mining today, humanity would still be on track to exceed 1.5 degrees Celsius of warming within the next decade. Not only that, but there is a good chance that the two degree target will also be missed due to a lack of strong government action to reduce society’s dependence on fossil fuels.

Bitcoin mining will not be the only catalyst that increases the exponential growth of renewable energy. Nor will it push us across the finish line to achieve our decarbonization goals. We at the Bitcoin Policy Institute are trying to quantify exactly what effect this will have, but we suspect that with network dynamics being what they are, bitcoins’ role as a catalyst for renewable energy won’t always be equal across all scenarios.

We shouldn’t expect bitcoin mining to be the easiest to set up at waste gas sites like landfills, orphan wells, or oil and gas fields. There is far too much anecdotal evidence to suggest that many of these wasted methane sites are well beyond the reach of bitcoin miners. This means we shouldn’t expect bitcoin miners to mitigate all methane emissions from landfills and the oil and gas industries.

I’m not saying bitcoin miners can’t mine with wasted methane, there are several energy startups trying to do just that. But let’s be clear, they are going to struggle to survive the tight profit margins bitcoin miners face when the market isn’t in the middle of a bull run. They are going to need additional sources of income if they are to remain viable in the long term.

Don’t get me wrong, bitcoin mining is good! It is agile, highly modular, and has minimal uptime requirements. Bitcoin has unique properties that make it good for supporting revenue from renewable energy projects right now. Miners active in demand response programs help minimize stress on the power grid during extreme weather emergencies. Some bitcoin mining companies sell their waste heat to greenhouses or work to use it for municipal heating.

Some miners are mitigating methane emissions in the oil and gas industry and a few are trying to prove the merits of landfill waste and agricultural waste. The tighter the profit margins, the more inventive bitcoin miners will have to be. That means mining revenue could end up being an afterthought in a larger energy operation. Would it be so bad if mining became another boring tool in our clean energy operations?

After all, did we really expect Bitcoin to solve climate change with emissions reduction alone? Bitcoin’s greatest impact on climate change will not come from mining but from the original purpose of the networks.

Climate change will destabilize and destabilize society with its unpredictable but increasingly likely effects on our food production, water resources and infrastructure. People often turn to the strong politician in times of deep uncertainty. If Bitcoin saves the planet, it will be through its preservation of economic freedom and with that, human rights. This is a story that I can sing from the highest towers.

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