Climate change could make Bitcoin mining even worse for the environment
Although 76% of bitcoin miners say they use renewable energy, this energy source represents only 39% of the total consumption of the world’s cryptomorphic miners, according to a survey by the University of Cambridge’s Center for Alternative Finance, published late last month.
The Cambridge Bitcoin Electricity Consumption Index (CBECI) estimates that bitcoin miners use 7.55 gigawatts of electricity per year. An alternative metric produced by Digiconomist estimates that bitcoin mining produces a carbon footprint comparable to that produced by Denmark and an energy consumption that rivals that of Colombia.
Of a group of 280 large cryptomorphic companies in 59 countries, Cambridge’s survey shows that 62% of mining companies said they used hydropower to power cryptomorphic miners; 17% said they used wind; 15% used solar and 8% incorporated geothermal energy.
However, the survey also shows that of the total energy consumed in cryptomore-mining, only 39% comes from renewable energy sources. The other 61% comes from non-renewable energy, such as fossil fuels, such as coal.
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According to CBECI, the Asia-Pacific region produces 77% of Bitcoin’s mining power. And according to the survey, 65% of that region’s power was said to depend equally on hydroelectricity and coal.
This is because Chinese mining companies depend on cheap hydroelectric power in the rainy season in Sichuan province, and then increase when the dry season begins in October and move to colder provinces like Xinjiang, where they depend on fossil fuels but save on cooling costs.
Alex de Vries, founder of Digiconomist and creator of the Bitcoin Energy Consumption Index, told Decrypt: „Bitcoin miners would probably love to have access to leftovers of renewable energy like this all year round, but the reality is that these excesses just don’t exist outside the summer period. ”
De Vries said climate change could make Sichuan’s cheap hydropower less attractive to miners, as changing rain, drought and flood patterns make it difficult to obtain a stable supply of cheap electricity.
„It should come as no surprise that we actually see significant increases in mining activity in countries (dependent on fossil fuel) like Kazakhstan and Iran,“ he said, when Cambridge found that these regions fed 10% of the Bitcoin hashrate, according to September data.
„Bitcoin mining is a 24/7 operation, year-round. It demands cheap and consistent energy. You simply won’t get it from renewable energy sources alone,“ he said. In places like Kazakhstan and Iran, which offer cheap fossil fuels, „miners can get cheap energy all year round.
A Digiconomist chart illustrates this point. Competition from miners and cost efficiency have made bitcoin mining less sustainable over time. Unless less energy-intensive mining algorithms are developed or innovations in renewable energy are discovered, the environmental footprint of Bitcoins mining will only get worse.