The theory that mining Bitcoin (BTC) is by definition harmful to the environment now finds little support. The Bitcoin network is becoming more sustainable every day. There is increasing discussion these days about how Bitcoin mining can be a catalyst for the entire energy transition. How does this work?
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Bitcoin is becoming more and more sustainable
First, let’s get the facts straight. Bitcoin mining is no longer as harmful to the environment as it used to be. The fact that sustainable energy is relatively cheap ensures that miners automatically choose the most sustainable energy option. This has resulted in 54.5 percent of the energy for Bitcoin mining being sustainable as of January 18, 2024. This is evident from data from the Bitcoin ESG forecast.
Although a large portion of Bitcoin’s energy consumption still comes from fossil fuels, it is premature to dismiss the Bitcoin mining sector as a polluting industry. Additionally, the Bitcoin mining industry is becoming more sustainable at the fastest rate compared to other major global industries.
The Bitcoin mining industry is actually on track to become carbon neutral within this decade. According to scientists at Cornell University in the USA, Bitcoin mining can also be used strategically to advance the global energy transition.
Bitcoin mining as a catalyst for the energy transition
The study concluded that surplus energy from wind turbines and solar panels, for example, can be used to make millions of dollars from Bitcoin mining. Before wind and solar parks are connected to the power grid, they are in a so-called development phase. According to the study, projects at this stage can generate capital through Bitcoin mining, which can then be reinvested in future sustainable projects.
According to the study, the opportunity for this application is greatest in Texas. There are 32 sustainable projects planned here that could generate $47 million using Bitcoin mining in the development phase described above.
Bitcoin mining also acts as a so-called stabilizer for the power grid. This is already the case in Texas, where many miners are active. Sometimes the energy demand cannot meet the energy production and there is energy left over. Where this energy would otherwise be lost, the Bitcoin mining sector can absorb this excess. Margot Paez from the Bitcoin Policy Institute says the following.
“There is often an imbalance between supply and demand, which leads to a surplus of sustainable energy. Bitcoin mining acts as a buyer who pays for energy that would otherwise be wasted. In this way, Bitcoin mining benefits from the use of sustainable energy instead of fossil fuels, thereby improving the network’s carbon footprint. It’s a win-win situation.”
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