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  4.  | Green energy gaining more ground in bitcoin (BTC) mining

Green energy gaining more ground in bitcoin (BTC) mining

Updates

The fact that bitcoin (BTC) needs electricity shouldn’t be a surprise. This energy is required to perform complicated calculations, which make the Bitcoin network one of the most secure payment networks on earth. While the discussion around climate change is developing, many have complained about the amount of energy that bitcoin mining needs. However, the electricity that the majority of bitcoin miners use apparently comes from clean sources.

Research: The majority of bitcoin mining uses renewable energy sources

Coinshares recently published a report which states that the majority of bitcoin miners use renewable energy sources. This is mainly the result of the locations where miners decide to settle. Places, where most energy is produced with wind, solar, or water, tend to have lower energy costs. This is especially the case during off-peak hours as hydro dams or wind turbines cannot be easily turned off. The energy that is produced during those hours is cheaper which makes them attractive energy sources for bitcoin miners.

It is, therefore, no surprise that miners can mainly be found in mountainous areas, or areas with many rivers such as the province of Sichuan in China. In this Chinese province, 40% of all mining activities in the world take place, as the Coinshares report reads.

Other locations where bitcoin miners can be found are Sweden, Norway, and Iceland, countries known for their significant renewable energy production. Coinshares calculated the share of renewable energy in bitcoin mining by taking into account the penetration of renewable energy on local power grids.

Based on these figures, Coinshares determined that 74,1% of bitcoin mining activities worldwide rely on renewable energy sources. This may come as a surprise to many, but it means that the impact of bitcoin mining on climate change, for example, is smaller than many might have expected.

Mining bitcoins with the sun

A good example of bitcoin mining using renewable energy sources is the plan of mining company Plouton Mining in the United States. Plouton Mining wants to build the largest solar plant meant for mining bitcoin in North America. This way the bitcoins are mined using nothing but the sun.

According to Plouton Mining, the solar power plant will cover 49 acres of solar panels. These panels together will generate about 10 to 13 megawatts of electricity every day. To give you an idea of the scale of this plant, an average household in the US barely uses 1 megawatt of power in a month!

The efficiency of bitcoin miners

Aside from the fact that about 74% of the bitcoin mining happens with renewable energy, mining rigs themselves are getting more and more efficient as the technology develops. In the early days of bitcoin mining, many people mined bitcoins using old computers or laptops of which they used the processor (CPU) to mine bitcoins. Then they moved on to mine with their graphics cards (GPU) as the results were better.

Finally, today, most miners use so-called ASIC mining rigs. ASIC stands for “Application-specific Integrated Circuit”. This type of chip is very good at one specific task, in this case, mining bitcoin. As time goes by, and big companies like Bitmain or Innosilicon further develop their rigs, the amount of electricity they use decreases. Coinshares also investigated this efficiency increase of mining rigs. In their report, they came to the conclusion that since 2018, mining rigs have become 10% more efficient.

Also good to know

Frequently asked Bitcoin mining questions in Google.

Frequently asked Bitcoin mining questions in Google.

Bitcoin mining has gained a persistently growing interest in blockchain enthusiasts, and this is no wonder — this fascinating technology and means of earning digital assets like Bitcoin, (before the merge of Ethereum), Kadena, and Siacoinare indeed a very alluring combination.

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