While writing the world’s most famous white paper, Satoshi Nakamoto defined the Bitcoin (BTC) mining process. It was found that the minting of new coins would be done by proof-of-work. In order to carry out this verification and to be able to mine the cryptocurrency, computers would have to solve complex mathematical calculations.
At first there weren’t many miners. However, that changed before Bitcoin’s first bullish rally. The mining competition exploded lead to a significant increase in the cost of competitive machines. And what is more important The energy demand skyrocketed due to the new machines, which mainly required energy for processing and cooling.
After eight years the demand for energy for Bitcoin mining has increased and has now reached 11 million 6.71 terawatt hours per year, according to data from the Bitcoin Electricity Consumption Index from the University of Cambridge or CBECI. At first glance, that seems like a lot, doesn’t it? But let’s take a closer look at the data to better understand the real impact of Bitcoin mining on the environment.
The energy consumption in Bitcoin mining
Recently, some influencers have popped up on social networks linking Bitcoin to an alleged increase in the use of fossil fuels., especially carbon. In fact, some countries – like China – ???? they use carbon as an important source of energy. But is this the main fuel used to produce the energy used?
According to a study by the University of Cambridge published in September:
“Hydropower appears to be the number one energy source, with 62% of surveyed miners claiming that their mines are powered by hydropower. Other types of clean energy (e.g. account for 38% and 36% of the respondents’ energy sources “.
In addition, according to the CBECI, 25,082 TWh of energy are produced worldwide each year. It only consumes 20,863 TWh, which means 16.82% is wasted. Bitcoin represents an energy consumption of 0.47% of the total energy produced and only 0.54% of the world’s energy waste.
Another study recently published by Galaxy Digital compares Bitcoin’s energy consumption to that of banks and gold mining. According to the document, the gold industry consumes 240.61 TWh per year while the banking system consumes 263.72 TWh.
Even more alarming is what the CBECI points out regarding unused electronic devices. Only in the US would it be possible to power the Bitcoin network for nearly two years if the power is consumed by connected devices that are not in use for a year.
Hence it is clear that Bitcoin’s energy consumption is not as relevant as claimed compared to global energy production and waste. Not to mention that this consumption of around 116 TWh is responsible for providing security and access to a decent life for millions of people around the world.
What we should really be aware of when we talk about Bitcoin being green is its carbon footprint.
Bitcoin carbon footprint
Unfortunately, Much of the energy currently being generated is high in carbon, and that should be the main concern and focus when talking about Bitcoin’s environmental impact.
According to data published in 2019 by the scientific journal Joule, Bitcoin’s carbon footprint is between 22 and 22.9 tons of CO2. In fact, it is a relevant amount that is comparable to the emission rates of Jordan or Sri Lanka. However, it is significantly lower than, for example, the energy consumption of the US armed forces, which, according to the data collected by Statista, emit 59 Tm CO2.
Fortunately, There are easy ways to offset Bitcoin’s carbon footprint. With asset tokenization, some companies have chosen to tokenize carbon credits, What? makes it easier for miners and everyone involved in the cryptocurrency industry to reduce the impact of generating electrical energy in mining machines.
Look into the future Our focus should be on reducing fossil fuel consumption with the aim of reducing the remaining carbon footprint.
It should be noted that the environmental problem cannot be solved by reducing the use of fossil fuels alone. It is even more important to optimize the use of the generated energy while reducing waste and unnecessary CO2 emissions..
Development of an ecological bitcoin
Energy consumption from mining is not expected to increase sharply in the coming years as it is related to computing power rather than the introduction of Bitcoin itself. Therefore 116.71 TWh should remain stable for some time.
To achieve the goal of a green or green Bitcoin network, cryptocurrency mining companies can do their part by buying carbon credit tokens and driving production with less fossil fuel consumption.. It’s unfair â ???? to say the leastâ ???? Accusing Bitcoin or miners of harming the environment while ignoring the other 99.54% of the energy generated.
Bitcoin is open and can go to the end of the world, regardless of restrictions or prohibitions by third parties. It is important to remember that this cryptocurrency was created to enable ordinary and disadvantaged people to lead a decent life, avoid depreciation, guarantee purchasing power and improve the quality of life.
This article does not provide investment advice or recommendations. All investing and trading involves risk and readers should do their own research when making a decision.
The views, thoughts, and opinions expressed herein are solely those of the author and do not necessarily reflect the views and opinions of Cointelegraph.
Jay hao He is a technology veteran and a seasoned industry leader. Before working at OKEx, he focused on blockchain-based applications for live video streaming and mobile gaming. Before entering the blockchain industry, he already had 21 years of solid experience in the semiconductor industry. He is also a recognized executive with successful product management experience. As the CEO of OKEx and a firm believer in blockchain technology, Jay envisions the technology will remove barriers to transactions, increase efficiency, and ultimately have a significant impact on the global economy.