Bitcoin has been a controversial subject since its inception in 2009, and the debate shows no signs of abating. Bitcoin mining is soaring in its popularity. Governments, nature lovers, and lawmen demand a ban or a curb on cryptocurrencies and mining processes.
Critics have been accusing Bitcoin mining of an inefficient, wasteful process that is a drain on the world’s resources and a detriment to the environment. Bitcoin mining uses more electricity than the entire nation of Switzerland, which consumes around 6.5 gigawatts of electricity per hour.
However, according to a recent study by the Blockchain Mining Council (BMC), this perception is utterly false. The cryptocurrency mining industry has shifted to a more environmentally friendly and sustainable energy source. Its usage for bitcoin mining and securing the world’s biggest cryptocurrency blockchain has increased by 59 per cent year on year.
What BMC Report On Bitcoin Mining Says
The BMC survey found that bitcoin mining has become less reliant on coal power and more reliant on renewable resources like solar energy over the past several years. And although bitcoin mining still consumes 7 gigawatts of electricity per hour, it is moving away from nonrenewable resources at an ever-increasing pace.
On Monday, the Bitcoin Mining Consortium (BMC) released a report detailing the findings of its recent survey of 44 Bitcoin mining businesses. The BMC claims that these companies represent half of all Bitcoin mining facilities in operation on the worldwide Bitcoin network.
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The survey results reveal how much energy Bitcoin miners use and where they source their power from. Michael Saylor, the BMC’s chairperson and CEO of Microstrategy, explained, “We believe that this will catalyze even more robust collaboration between corporate miners, private miners and national miners.”
Each company reported its hash rate, computing power output, and total energy consumption. They also noted the percentage of energy generated by renewable sources such as hydroelectric, solar, wind, nuclear, and geothermal energy generated by each company.
Miners Are Adopting Greener Solutions
According to a new study, the worldwide Bitcoin mining business is relying on greener energy sources. The survey reveals that the mix of green energy for Bitcoin mining activities has improved from 36.8 per cent in the first quarter of 2020 to 58.4 per cent in the 2021 first quarter.
This green energy mix represents a slight decrease of 0.1 per cent from the previous quarter but a substantial increase compared to the predicted number of 36.8 per cent for the first quarter of 2021.
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Another finding of the paper is that the energy efficiency of these mining activities has improved. The hash rate has climbed by 23 per cent in the past year, from 164.9 to 202.1, despite a 25 per cent decrease in power use during the same period. This is a 63 per cent increase in efficiency over the previous year and a 5,814 per cent increase over the last eight years.
BMC’s Bitcoin Mining Report Flawed?
BMC members provided information for the new report, compiled by BMC employees. According to the analysis, this data collection method may have been flawed. The members claimed to employ a 64.6 per cent mix of renewable energy sources. However, there is no way to independently verify this claim because the group has no independent oversight.
The worldwide numbers were derived from information gathered from BMC members throughout the world, except for China—which accounts for more than two-thirds of all mining activity on the Bitcoin network—and several former Soviet Republics.
The figures provided by Joules seem more plausible than those put forward by BMC. According to Joules’ analysis, cryptocurrency mining led to a 17 per cent rise in carbon emissions caused by activities carried out to maintain the Bitcoin network’s uptime during Q1 2021.
Unfavorable Governments For Bitcoin Mining
Governments and environmentalists have condemned Bitcoin mining throughout the globe for the amount of energy it consumes. The European Union has disputed whether or not to outlaw Bitcoin because of its astronomical energy usage, mainly sourced from fossil fuels.
Bitcoin mining has been criticized for being energy-intensive and having a huge carbon footprint, with many seeking to improve its energy efficiency. To reduce the environmental damage caused by Bitcoin mining, miners have committed to using cleaner and more sustainable energy sources.
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The most severe problem with Bitcoin is its consensus mechanism, which is a procedure required for confirming transactions and adding them to the blockchain. Bitcoin uses the proof-of-work consensus method, which necessitates the usage of high quantities of energy by miners to validate transactions.
In the last five years, the price of bitcoin has increased by more than 300%, making it one of the most expensive digital currencies in history. As a result, bitcoin mining businesses are looking for the most cost-effective energy sources to ensure profitable operations.
Wind and solar energy are now the cheapest forms of energy, and they will soon be able to compete with thermal energy in terms of cost. As a result, miners will need to contribute to developing renewable energy infrastructure, which will benefit everyone.