The use of renewable energy in Bitcoin mining
Bitcoin is a decentralised store of value with a fixed supply. Day by day, its use by individuals and institutional is becoming more common. With this increase in adoption has come an uptick in Bitcoin mining activity. While there are many individual miners, the existence of enormous mining facilities has raised a lot of questions about energy consumption. Thought leaders and governments have said different things about Bitcoin mining, but some have failed to consider the bigger picture. If you have questions about the energy consumption of Bitcoin mining and the use of clean energy in Bitcoin mining then this article will help you.
What is Bitcoin mining?
Bitcoin is produced and distributed through a process known as mining. Bitcoin mining occurs when hardware devices with special software approve Bitcoin transactions by solving complex problems. They are rewarded with newly minted Bitcoin if they are successful. The people involved in the Bitcoin mining process are known as miners.
Energy consumption in Bitcoin mining
Miners could be an individual or an entire company dedicated to mining Bitcoin. But regardless of the scale of the operation, be it a single computer or a large facility with hundreds of computers, all mining requires a certain amount of energy.
Because miners are rewarded with Bitcoin for each new block they add to the blockchain, there is fierce competition between them. They are constantly trying to perfect their software and hardware setup so they can be the first miner to gain the Bitcoin reward. As more advanced and powerful systems are deployed for mining, the overall energy consumption increases. The carbon footprint of this energy-intensive process has become a big topic recently.
The use of renewable energy in Bitcoin mining
The energy debate around Bitcoin mining is pushing miners to consider different ways of operating — encouraging them to use more sustainable sources of energy. Types of energy like hydroelectric, natural gas and solar are now being used in Bitcoin mining. Some mining companies have relocated their facilities in the Arctic circle. Others are moving to hot countries and dedicating large areas of land to farm solar energy. Some have even relocated their facilities to active or passive volcanoes in an attempt to harness geothermal energy in their mining operations.
Similarly to other fields or sectors, environmentally-conscious actions are starting to become more common in Bitcoin production. Because of decisive actions like these, it’s estimated that over 50% of the energy used in Bitcoin production today is from renewable sources. This rate is increasing too. Furthermore, it has been proven that the energy used in Bitcoin production is less than the energy spent in gold mining or banking transactions.
