Why is everyone concerned about bitcoin’s energy use, from Elon Musk to Janet Yellen?
Elon Musk said Tesla has halted purchases of vehicles with bitcoin due to concerns over the “rapidly increasing use of fossil fuels for bitcoin mining.” thereafter we have witnessed a solid crash.
Elon musk Tweeting about Tesla stop taking Bitcoin as payment
But are these concerns are real? Is this the concern over energy consumption or over the usage of fossil fuels? let’s break this down.
Table of contents
Bitcoin’s Energy Consumption Per Year
According to Cambridge University experts, Bitcoin mining presently consumes roughly 110 Terawatt Hours per year. That’s around 0.55 percent of worldwide electrical production, and it’s more energy than Argentina, Malaysia, and Sweden consume in a year. The index named Cambridge Bitcoin Electricity Consumption Index can be found on their official website
Environmental Impact; Carbon dioxide emissions?
It is critical to recognize that energy consumption does not always equate to carbon dioxide emissions or pollution. One kilowatt-hour (kWh) of energy generated by a coal-fired power plant, for example, has a significantly different environmental impact than one kWh produced by a solar park.
The sources of energy utilized to create power must be investigated more carefully in order to establish Bitcoin’s carbon dioxide emissions and hence its true environmental footprint. While some mining operations reveal the energy sources that power their machinery, the bulk of mining operations keep their energy share classified.
Does this mean Bitcoin heats up the oceans?
According to Cambridge, Bitcoin does not appear to be a direct contributor to climate change at this time. Even if Bitcoin mining were entirely powered by coal — a highly unlikely scenario considering the large number of facilities that run entirely on renewables — total CO2 emissions would be less than 58 million tones which would roughly correspond to 0.17% of the world’s total emissions
What is this calculation based upon?
- This calculation is based on the following assumptions:The Bitcoin network consumes 50 TWh of electricity on an annual basis;
– One kWh of electricity generated by brown coal produces 1.17kg of CO2.
2. BP (2018) BP Statistical Review of World Energy. 67th Edition, p.49
Myth Buster
Since we have established the fact that Energy consumption is not directly proportional to global warming. Cambridge which stated that Bitcoin’s energy consumption is high, at the same time suggests that a further deeper study is needed to understand the split between renewable and non-renewable energy resources being used.
Cambridge also states that the Global Warming or Ocean heats ups due to Bitcoin’s Mining is highly unlikely
This now will lead me to one of the latest happenings Bitcoin Mining Council Q2 2021 Briefing
What is Bitcoin Mining Council?
The “Bitcoin Mining Council” is a voluntary and open forum of Bitcoin miners committed to the network and its core principles. The “Bitcoin Mining Council Q2 2021 Briefing” is open to the public and will be broadcast live on YouTube at 5pm EDT. During the briefing, members of the Bitcoin Mining Council will provide an update on the progress made to deliver on their mandate: to promote transparency, share best practices, and educate the public on the benefits of Bitcoin and Bitcoin mining.
The brief is around 1.5 hours long, but I’ll ease it out for you guys.
Agenda / Executive Summary
Bitcoin mining uses a negligible amount of energy, is rapidly becoming more efficient, and is powered by a higher mix of sustainable energy than any major country or industry.
To sustain the mining and network effect, and to gain profits, it’s inevitable that the miners have no choice renewable energy over fossil fuels and the adaption is happening at a robust phase.
Primary Energy Consumption: Bitcoin Mining Vs Countries (Twh)
Global Bitcoin Mining Has The Highest Sustainable Energy Mix
Bitcoin Mining Energy Use Vs Total Global Energy Use
Bitcoin Mining Energy Use Vs US Electricity Generation Use
Q1 Vs Q2 2021 Bitcoin Mining Metrics In Q2, The Sustainable Energy Mix Reached 56%
BMC Survey Methodology
The Bmc Surveyed Bitcoin Miners Around The World Asking Three Questions;
- How Much Electricity Does Your Total Fleet Consume Today?
- What Is The Total % Of Sustainable Electricity* Within Your Fleet’s Power Generation Mix Today?;
- What Is The Total Aggregate Hashrate Of Your Fleet Today?
Note – *The Annotated Term “Sustainable Electricity” was defined as electricity generated by: Hydro, Wind, Solar, Nuclear, Geothermal, And Carbon-based Generation with net carbon credits. And Bmc’s “Sustainable Electricity” definition Is based on the principles brought forward by Eia’s “Net Zero By 2050” Report. The report focuses on the needed global energy transformation and recommends the use of renewable energy generation, nuclear and the use of credits to incentivize and support additional development of renewable energy development.
By the way …
The entire webinar was led by Michael Saylor, a very prominent leader in the Industry.
Conclusion
Any technology adaption takes some time, Bitcoin has show growth and network effect exponentially. Miners are shifting to renewable energies so that they can make profits.
Bitcoin is inevitable, the fud will be chopped off with facts repeatedly.
Author: Eth!c@l Aka Kumar
Sources
- Value Represents Data Compiled From Bmc Advisory Council Miners. Annualized Primary Energy Use.
- Estimated Global Bitcoin Network Annualized Power based on Bmc Analysis, Assumptions And Extrapolation.
- Country Data Compiled From Bp’s Statistical Review Of World Energy (2021).
Https://Www.Bp.Com/En/Global/Corporate/Energy-economics/Statistical-review-of-world-energy/Primary-energy. - International Energy Agency
- https://www.Eia.Gov/Totalenergy/Data/Monthly/Pdf/Flow/Total_Energy_2020.Pdf
- https://Cbeci.Org/ (Updated: June 29, 2021) Annualized Values Are Used For Bitcoin Mining Energy And Electricity Use.
- Bmc Advisory Council Membership Data, Analysis And Extrapolation. As Submitted As At June 30, 2021.
