Since the advent of Bitcoin, the electricity consumption of crypto-mining has been debated. It’s no secret that our planet is facing a double ecological and energy crisis. To deal with this, we urgently need to make an energy transition. The crypto mining industry, mainly the bitcoin industry known to be energy-intensive, seems to have made progress in recent years. Indeed, the mining of bitcoins would today be powered by more than 59.4% by renewable energies. Based on the assumption that bitcoins are here to stay, it seems crucial to us to discuss how their mining supports the energy transition. In this article, we explain how supplying mining farms with renewable energies could promote or even accelerate the energy transition.
What is the relationship between crypto mining and energy consumption?
Simply put, bitcoin mining is the process by which bitcoins are created. Furthermore, it is also an essential part of the operation of the Bitcoin blockchain. Indeed, to verify transactions in order to add new blocks and maintain the register, Bitcoin requires the implementation of specific machines (especially ASICS) say ” minors “. These in turn require enormous amounts of energy to solve increasingly complex mathematical equations. This process is known as “Proof of Work”. With the increase in bitcoin’s value, more and more people have invested in the mining industry. Knowing that the hashing power or mining difficulty increases as the network grows, the mining industry consumes more and more energy.
In the midst of an energy crisis like today, to take advantage of this activity, miners do not hesitate to travel the world in search of a low-cost energy supply. The latter are mainly looking for energy produced but not consumed, called “surplus “.
These quantities of energy which, in the past, constituted enormous losses for investors in the sector are now valued by miners. According to some reports, including that of BMC, bitcoin mining would be fueled primarily by surpluses from renewable energy power plants. Assuming this is true, should we say that crypto mining participates in the energy transition?
Does crypto mining improve the energy transition?
From the outset, it is important to stress that it is not easy to answer this question on a global scale. Although no study, to date, has been able to access all of the data from the global crypto-mining network, the Bitcoin Mining Council (BMC), publishes a quarterly report estimating the global energy mix of the bitcoin mining industry. According to his reportrt of the third quarter of 2022the global bitcoin mining industry would be fueled by 59.4% by clean energies. According to the same report, Bitcoin would represent the bulk of all crypto power.
” With a hashrate approaching 267 EH, Bitcoin represents 99% of all crypto power, offering 100 times the security of all other crypto networks combined. said Mr. Saylor, CEO of MicroStrategy.
Currently, most miners would use extra capacity from renewable energy plants, mainly hydroelectricity. The purchase of surpluses by miners would represent significant funding for the energy transition.
“Today, BTC mining represents the equivalent of a $4 billion subsidy for the renewable energy sector “said Sébastien Gouspillou during a visit to BFM crypto.
In light of the above, crypto mining is part of the dynamics of efforts for the energy transition. With a subsidy of more than 4 billion, poured directly into several renewable energy production projects, mining has become one of its biggest partners. With crypto adoption accelerating, the BTC could facilitate the energy transition.
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