Since Elon Musk began to promote crypto-asset investment, the reputation of crypto assets has been growing. Environment impact of crypto assets is often criticized. Many environmental activists have caught Bitcoin mining as it can destroy natural ecosystems. True? What is Bitcoin energy consumption, then?
We know the Bitcoin price is on the rise due to Tesla Inc’s cryptocurrency investments of 21 trillion.
What amount of energy can an industry consume? The sheer amount of pressure coming from organizations around the world gives a call to reduce the use of non-renewable energy sources such as coal and oil encouraged to reduce carbon emissions. We need to answer complicated questions to learn more about this.
It refers specifically to our priorities as citizens. This includes goods and services that allowed depleting these resources. However, it is ultimately a matter of price. Bitcoin and its energy consume becoming more prominent. This refers to the ever-growing topic of where and for whom these digital currencies aim.
Mining: How It Works Mining
It is a way to clarify transactions that a made on the blockchain. Some miners receive compensation for their work as auditors in the blockchain.
This agreement intends to keep Bitcoin users honest. It regulated by Satoshi Nakamoto (Bitcoin founder). Miners can verify transactions to help ensure the blockchain is not double-spending.
To maintain a competitive advantage, increasing mining operations must upgrade their equipment. Many mining pools operations around the world now have hundreds to several thousand rigs that are continuously operating.
One of them is Application-Specific Integrated Circuits (ASIC), which specialize in types of computing equipment that can use to mine crypto-assets. This ASIC is capable of producing a lot more heat than it does hashing functions.
Cool air and fans may suffice for smaller operations. Extensive mining facilities, however, require high-quality cooling equipment. The problem is, it increases energy consumption during mining.
What are the Alternative Resources to Mining Bitcoin?
People may become more aware of how many natural resources are being dredged for Bitcoin mining because of the power required. But this is not a fact that can disprove. There are many Bitcoin miners out there who use more eco-friendly technology.
A new report from The Hindu shows that 56% of Bitcoin mining energy worldwide, is derived from renewable sources.
Data shows that renewable energy sources power 75% (or more) of Bitcoin mining. These resources can be water, wind, or geothermal. Some even use solar power.
What is the Bitcoin Energy Consume Per Transaction?
In 2019, the Cambridge Campus carried out a study showing that Bitcoin energy consume is more than 7 GW (Gigawatt), approximately 64 TWh.
This is equivalent to 0.2% of the world’s electricity supplies. This is equivalent to electricity to produce by the seven nuclear power plants at Dungeness, England.
The study by the Cambridge Campus were not the only ones that were conduct. Digiconomist, economic analysis, and digital base also conducted a study about Bitcoin mining.
Digiconomist stated that Bitcoin’s energy usage per transaction as of September 30, 2019, had been around 87.1 trillion watts (or 8.7 TWh) in one year.
This is the equivalent of one year’s electricity use in Belgium.
Bitcoin can use energy that other industries cannot use
Bitcoin can mine almost anywhere, which makes it different in terms of energy consumption. Most energy used in the world must be within a reasonable distance of the user. However, Bitcoin has no such limit. This allows miners to access a resource that isn’t accessible to most industries.
Hydro is the most well-known example. The majority of renewable hydropower is wasted each year during the rainy seasons in Sihuan/Yunnan. Some of these areas have high production levels that exceed local demand. Battery technology isn’t advanced enough for transports energy from a rural areas into urban centers.
These regions represent one of the most underutilized energy sources on the planet. Therefore, it is not surprising that they are China’s mining heartland. They account for roughly 10% of global Bitcoin miners in the dry and 50% the both in the dry and rainy seasons.
Natural gas flares offer another option for carbon-neutral mining. The majority of natural gas released by oil extraction today is a by-product. This means that the energy polluting the environment never makes it to the grid. The majority of traditional programs cannot use this energy effectively because oil mines are usually located in remote regions.
Bitcoin miners in North Dakota, Siberia, and elsewhere are already taking advantage of this opportunity to monetize the resource. Some companies are also looking at ways to reduce greenhouse gas emissions by burning more gas in a controlled manner. It’s a tiny player in Bitcoin mining today, but it does show that there are enough natural gas flares to run the entire Bitcoin network.