Bitcoin mining is getting 'dirty'

 The proportion of fossil energy and nuclear energy used to mine Bitcoin has increased in recent years, causing experts to worry.


On September 27, the Cambridge Center for Alternative Finance (CCAF) released an important data update specifically for Bitcoin mining called the Cambridge Bitcoin Electricity Consumption Index (CBECI).

Accordingly, over the years, the power source for Bitcoin mining has undergone many major changes. Nuclear energy and natural gas such as coal become the primary source of power to run Bitcoin mining rigs, instead of green energy like hydro or solar, wind or tidal power.

As of January, fossil fuels such as coal and natural gas accounted for two-thirds, or 62% of all Bitcoin mining electricity.

Earlier this year, coal accounted for nearly 37% of Bitcoin's total electricity consumption, making it the largest source of energy for mining this cryptocurrency. For sustainable energy sources, hydropower is the largest resource, accounting for about 15%. From 2020 to 2021, the market share of hydropower has decreased from 34% to 15%.

In contrast, the past two years, the use of natural gas and nuclear power in Bitcoin mining has increased significantly. From 2020 to 2021, the share of gas in mining operations will increase from 13% to 23%. Nuclear energy increased from 4% to nearly 9%.

Cambridge analysts suggest that the China ban from 2021 is the main cause of the large fluctuations in Bitcoin's energy consumption during this period. The migration of miners has led to a significant reduction in the share of hydroelectric power. While in China, miners mainly took advantage of hydroelectric plants to run farms.

After fleeing China, they had to look to other fuel sources such as coal. Depending on the region, the proportion of fossil fuel dependence has different changes. While miners in countries like Kazakhstan are still dependent on fossil fuels, in Sweden sustainable energy sources account for 98%.

The increase in nuclear power and gas in Bitcoin mining also reflects the shift of the cryptocurrency mining market to the US. According to the U.S. Energy Information Administration, natural gas generates most of the nation's electricity, accounting for more than 38 percent of the nation's total electricity, and coal and nuclear make up 22 percent and 19 percent, respectively.

However, these figures are still controversial. Ben Gagnon, Director of Bitcoin mining company Bitfarms, thinks that only about 40% of fossil fuels are involved in operating Bitcoin mining pools. Meanwhile, Alexander Neumueller, CBECI project lead, said that the Bitcoin Mining Council requires members to self-report data through a survey, so that data is not enough. CBECI's method is to use information from the Bitcoin mining map compiled by them, then determine the location of the miner and then check the power consumption in each specific area.
Previous Post Next Post

ADS x

{ads} x