Bitcoin Mining Is Here To Stay, But It Has To Get Greener

Bitcoin’s BTC/USD massive energy usage has become a hot topic lately. And Tesla Inc TSLA chief Elon Musk’s recent decision to halt BTC payments due to environmental concerns has ignited a fiery debate around the issue.

While many have attacked Musk for doing so, his actions have shed some light on a crucial problem: Bitcoin mining consumes massive amounts of energy. Personally, I don’t blame him for pointing this out – no matter his intentions.

Are miners really wasting this power, which by the way is close to the annual electricity usage of Norway, unnecessarily on Bitcoin? I don’t think so.

Bitcoin utilizes the Proof-of-Work (PoW) consensus mechanism, which requires miners to leverage their computational power through physical mining equipment to validate transactions and add new blocks to the chain.

As Bitcoin derives its security from power usage, it needs to consume massive amounts of energy to survive and remain resilient against both internal and external threats.

With a nearly 99.99% uptime and only two network outages in its 12 years of history, Bitcoin competes with leading cloud providers as one of the most reliable and resilient web services.

For that reason, it would not be wise to make drastic changes to how Bitcoin secures its network. The more productive approach would be to  focus on the energy mix used by the Bitcoin power their equipment.

Despite claims that cheap coal-fired electricity accounts for most of the cryptocurrency’s power usage, we can safely conclude that BTC mining is increasingly getting greener, with 73% of the network’s hash rate coming from renewable energy sources.

Furthermore, critics of Bitcoin’s high electricity usage tend to forget that BTC mining has an excellent ability to make use of energy that is otherwise wasted.

And more and more projects have been capitalizing on this opportunity to reduce CO2 emissions and convert waste energy into securing the Bitcoin network. 

Excellent examples include mining farms in Sichuan taking advantage of the region’s hydropower surplus, oil and gas producers leveraging (otherwise flared) stranded gas to mine BTC, and even companies growing food and fish using the heat produced by mining equipment.

Given Bitcoin’s growing renewable energy usage and ability to conserve waste energy, I believe the long-term solution to fix the cryptocurrency’s carbon footprint is to speed up development around these fields.

An excellent way to achieve that is through government incentives via subsidies and partnerships with the heavy machinery industry and manufacturing businesses. This could make mining environment-friendly while improving the efficiency of core businesses of the economy. Thanks to initiatives similar to this, Bitcoin would get a lot greener in a few years, with BTC mining eventually becoming a carbon-neutral activity at some point in the future.

Most importantly, Musk’s recent actions have just kickstarted a crucial conversation around this topic. With this in mind, I expect the pace of development to increase around this field, which could potentially make crypto one of the first industries to achieve net-zero carbon emissions.