Bitcoin, the world’s most valuable cryptocurrency, is going green, and climate activists have noted the pace at which the network has cut carbon emissions in the past three years. However, how this could affect bitcoin prices and attract tech companies like Tesla, the electric car maker, is yet to be seen.
The carbon footprint associated with bitcoin miners is declining rapidly
As of late May, the on-chain data is from Woonomic subscriber By Daniel Patten, a climate technology investor and activist, he notes that the amount of carbon emissions associated with bitcoin mining have decreased by nearly 50% from 601 g/kWh to 299 g/kWh in three short years.
It should be noted that the Bitcoin hash rate and prices have been rising steadily during this time. In the last quarter of 2021, the price of bitcoin soared to as high as $69,000 before crashing below $16,000 in November 2022. Although prices have since recovered, rising to $31,000 in April 2023, the rate has Retail is rising steadily over the years.
In proof-of-work networks such as Bitcoin and Litecoin, the hash rate transmits the computing power allocated to the network in real time. It is a variable that makes the network secure and robust against third-party attacks, and it can also be used to measure the speed at which the Bitcoin platform is consuming power.
Miners channel computing power as a “hash rate” to secure the Bitcoin network. They need this to verify transactions against network rewards. The higher the hash rate, the higher the chance of earning a block, hence 6.25 BTC every 10 minutes.
However, the intense competition for block rewards has been partially blamed for environmental degradation and carbon emissions from miners. To stay competitive, bitcoin miners have to operate energy-intensive equipment. Critics have long maintained that the electricity that powers them comes from coal and other non-renewable sources.
As of June 2, the Bitcoin Energy Consumption Index Offers That 105.23 TWh powers bitcoin. It is the same amount of electricity that Kazakhstan consumes. They add that the resulting carbon emissions amount to 58.69 million tons of carbon dioxide, compared to those emitted from Libya.
but, data From Bitcoin Mining Advisor, a group comprised of some of the largest bitcoin miners in the world, provides more insight into cryptocurrency power consumption after conducting a study on its members:
(…) BMC (Bitcoin Mining Council) members and survey respondents currently use electricity with a sustainable energy mix of 63.8%. Based on this data, the sustainable electricity mix in the global bitcoin mining industry has improved marginally to 58.9% and remains one of the most sustainable industries globally.
Does green mining support bitcoin prices?
In this sense, the Woonomic data coincide that emissions have decreased significantly over the past three years. It has nearly halved to 299g/kWh, indicating miners are turning to greener energy sources to power their rigs.
Tech companies are likely to consider adopting BTC as a payment with a lower carbon footprint. Earlier, Tesla reversed its decision to accept BTC for payment, citing the impact of Bitcoin mining on the environment. With lower carbon emissions, this could positively impact Bitcoin as major entities around the world will adopt the currency and the network.
Featured image from Canva, chart from TradingView
