The environmental impact of Bitcoin (BTC) mining has always been a controversial topic. On the one hand, critics emphasize that securing the Bitcoin network needs more power than annual electricity consumption of some entire countries. On the other hand, a large part of the crypto community argues that it is a necessary activity that has enabled the Bitcoin blockchain to remain extremely resistant to external attacks with almost 99.99% of the time for more than 14 years of its history.
However, recent developments in the market have provided an opportunity for participants to make Bitcoin mining finally sustainable.
Bitcoin mining does not deserve its bad reputation
Before going through the benefits themselves, it is essential to first get some facts straight about Bitcoin mining. With comparisons with the energy consumption of nations and estimates that a single BTC transaction has a carbon footprint of almost 820,000 Visa transactions, it must be emphasized that this activity does not actually produce emissions.
Instead, this “dirty work” is done by the power plants that supply the electricity to the mining rigs. Similar to households or other commercial entities, miners only use the electrical infrastructure that exists in any given location.
Since Tesla stopped accepting Bitcoin payments in May 2021, citing environmental concerns, many have jumped on the bandwagon to criticize the blockchain network’s energy consumption. However, while it is important to address the high electricity usage of Bitcoin mining, it should not be done in a vacuum, as it is not the only powerful industry out there.
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According to the Bitcoin Mining Council, BTC mining consume only a fraction of the energy required to run industries, such as construction (3.77%), finance and insurance (4.45%), shipping (5.41%) and aviation (5.43%). It even takes almost 2.6 times the electricity to mine gold than to secure the Bitcoin network. And that’s without even discussing the disposal of electronic devices, as well as agriculture and cattle breeding, which are among those with the most significant environmental footprints.
Considering the above, it seems unfair to point out the high electricity usage of Bitcoin mining without mentioning how much power other industries consume every day.
Mining is becoming an increasingly sustainable industry
Despite controversies surrounding the topic, the fact remains that a significant amount of electricity is needed to secure and maintain the Bitcoin network. The question is how to make Bitcoin more sustainable.
One solution would be to combine Bitcoin mining with other business activities in a beneficial way. For example, hydro-cooling mine farms can provide heat to greenhouses, fish farms, buildings and even entire communities. While only eight WhatsMiners are needed to heat a 10,000-square-foot greenhouse, increasing water temperature by 10 degrees Celsius with mining rigs can shorten the growth period of salmon in fisheries by up to three times. Another possible use case includes developing small hydropower plants to co-consume electricity with local communities.
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Using associated petroleum gas (APG) to power Bitcoin mining rigs is also a key highlight in this field. As you may already know, APG is a by-product of oil drilling. Since it is not always worthwhile for producers to use it, they regularly burn it on site. The latter process is called gas flanking, which led to 2.7 billion tons of CO2-equivalent emissions in 2021, along with the gas wasted in ventilation and methane leaks.
Instead of wasting this resource, Bitcoin miners can turn APG into energy to power their rigs. By preventing flare-ups, this activity can have a positive impact on the environment. In fact, a report revealed that Bitcoin mining can decrease the percentage of yellow gas of each oil producer by 80%.
At the same time, researchers have also found that it is by far the most cost-effective way to reduce emissions, surpassing the values of wind and solar many times over. This is probably why many smaller oil and gas companies in the US are threatening BTC with flared gas.
The path to a greener Bitcoin
As Bitcoin miners migrate to countries where they have access to cheaper energy in the form of renewable energies, this has presented an opportunity for market participants to increase the sustainability of the industry.
With initiatives like preventing gas flaring and combining it with other business activities, the long-term goal is to make Bitcoin mining environmentally friendly. Ideally, every industry should become as sustainable as possible while minimizing the damage caused to the environment. Striving to make this possible is what responsible market participants are all about.
Bitcoin mining is already doing a lot to transform the energy sector due to miners being very flexible in their electricity consumption. And as the sustainability of this industry will improve in the coming years, it will attract many large-scale investors who are interested in investing in green businesses.
Didar Bekbauov is the CEO of Bitcoin mining company Xive, which he co-founded in 2019. He previously served as managing partner at Hive Mining. He holds an undergraduate degree from Kazakh-British Technical University and a master’s degree in financial management from Robert Gordon University.
This article is for general information and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed here are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.