Did you know that 56.5% of Bitcoin miners use green energy? Bitcoin mining employs more sustainable energy than the banking sector or the gold industry. Bitcoin mining is an energy-intensive industry, with over 80% of operational costs being electricity bills. Choosing the right energy source is crucial. The use of renewable and wasted energy has increased significantly in recent years, shifting the narrative away from Bitcoin mining being harmful to the environment. What does the energy matrix of Bitcoin mining look like, and why are renewable sources important for miners to consider? Let’s find out!
Total Power Usage Bitcoin Network
Power Source Matrix of Bitcoin Mining
What Are Green Energy Sources in Bitcoin mining?
Sustainable Energy Usage by Bitcoin Miners
Will Tesla Accept Bitcoin Payments Again?
The Positive Environmental Impact of Bitcoin Mining
Incentive for Renewable Energy Projects
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Balancing the Grid
Consume Stranded and Wasted Energy
Monetizing Vented and Flare Gas while Reducing Emissions
5 Reasons Why Bitcoin Miners Should Consider Renewable Energy
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Total Power Usage Bitcoin Network
According to the live tracker of the Bitcoin network’s power demand by the Cambridge Bitcoin Electricity Consumption Index (CBECI), the Bitcoin network consumed an estimated 16.18 GW in July 2024. The model by CoinMetrics shows total power draw of 17.6 GW in January 2024 and reaching 23.4 GW in April. Following the halving event, power usage started to decline, ending at 19.8 GW in July. Over the course of two years the estimated electricity power used by the Bitcoin network doubled.
What Are Green Energy Sources in Bitcoin mining?
Green energy sources, often used interchangeably with renewable energy sources, are those that are naturally replenished and have minimal impact on the environment. Some common examples include:
Solar energy: Generated from sunlight using photovoltaic cells or solar panels.
Wind energy: Produced by harnessing the kinetic energy of wind using wind turbines.
Hydropower: Generated from the energy of moving water, typically by damming rivers or utilizing tidal movements.
Biomass energy: Derived from organic materials such as plants, agricultural and forestry residues, and organic waste.
Geothermal energy: Harvested from heat stored beneath the Earth’s surface, often through the use of geothermal power plants.
The classification of nuclear power as a form of renewable energy is an ongoing subject of debate. While nuclear power plants do not emit greenhouse gases during operation, the fuel used in nuclear reactors (such as uranium) is finite and not naturally replenished on human timescales.
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Sustainable Energy Usage by Bitcoin Miners
56.5% of Bitcoin mining is using sustainable energy, this is an equivalent of 11.2 GW. Bitcoin mining employs more sustainable energy than various other sub-sectors, such as the banking sector, gold industry, iron & steel industry, and agriculture. The industry has also achieved the highest increase in sustainable energy mix (+58%) during the period from September 2019 to July 2024, compared to other global industries.
Will Tesla Accept Bitcoin Payments Again?
Four years ago, Tesla stopped accepting Bitcoin due to environmental concerns, even though the Bitcoin mining industry had increased its use of renewable energy. On February 8, 2021, Tesla announced a $1.5 billion investment in Bitcoin and started accepting it for vehicle payments. However, on May 13, 2021, Tesla halted Bitcoin payments due to concerns over fossil fuel usage in mining. Elon Musk stated that Tesla would resume Bitcoin transactions once 50% of the mining energy came from clean sources. Despite these improvements, Tesla has not yet returned to accepting Bitcoin payments.
The Positive Environmental Impact of Bitcoin Mining
For many years, the majority of media outlets portrayed Bitcoin mining as an evil industry because of its high energy consumption. However, the fact that Bitcoin mining is power-intensive and energy-dense are actually characteristics that allows mining to have a positive impact that goes beyond just using sustainable power.
Incentive for Renewable Energy Projects
Wind and solar are intermittent sources of energy, as their supply depends on weather conditions. This randomness of generation causes unreliable frequency and voltage production. Additionally, demand for electricity fluctuates and does not always match supply. Bitcoin miners can address this issue by purchasing energy from wind and solar farms when energy is produced at times when there is not sufficient demand. By doing so, miners monetize renewable power that would otherwise be wasted or require expensive storage technology.
By making money from energy that would otherwise be lost, power companies can pay off their high initial investments faster. Bitcoin mining can also play a role in funding the development of projects. Miners can be connected the moment windmills or solar panels start generating power. The income generated from mining can also be used to fund the expansion of wind or solar farms. Alternatively, power companies can use the funds to invest in transmission or energy storage solutions.
And now we move on to the next content for our Premium Members:
Balancing the Grid
Consume Stranded and Wasted Energy
Monetizing Vented and Flare Gas while Reducing Emissions
5 Reasons Why Bitcoin Miners Should Consider Renewable Energy
