Energy

Bitcoin mining could help balance out the production and consumption of renewables, says top crypto miner

Summary

Using renewable energy in bitcoin mining can help advance green energy technologies by consuming excess energy and funding to expand renewables infrastructure. According to Mike Colyer, Chief Executive Officer of Foundry, a satellite firm for cryptocurrency giant Grayscale, mining bitcoin […]

Using renewable energy in bitcoin mining can help advance green energy technologies by consuming excess energy and funding to expand renewables infrastructure. According to Mike Colyer, Chief Executive Officer of Foundry, a satellite firm for cryptocurrency giant Grayscale, mining bitcoin can be “a bridge between” the current green power production and the production of future renewable.

Colyer argues that as the world, especially North America, shifts to renewables, clean energy production is more than consumers need. There is a need to find ways to use surplus energy. Besides, oversupply of green energy can be hard to handle and expensive for renewables producers. He suggests that bitcoin mines should be put near renewable energy projects to use up the surplus power. The bitcoin yielded from the mining can, in turn, help in the expansion and development of the clean energy sector.

“It allows for a faster payback on those solar projects or wind projects, which means more of them can be built faster in regions where before it was not attractive because they would produce too much energy for the grid in that area,” said Colyer. Other cryptocurrency miners have supported this field of thought, although it is hard to measure the change that mining brings on a green energy project. However, most consumers are still unsure of how bitcoin mining can positively impact climate change. Instead, most investors are shying away from bitcoin over climate concerns over the high amounts of energy used in mining.

“[Bitcoin] is not good news for the environment,” said Bank of America analysts. The mining of bitcoin uses energy that can power the whole of Netherlands in one day. “Bitcoin’s annual electricity use has risen by more than 200 percent in the last two years, raising major environmental issues,” added the analysts, among them commodities strategist Francisco Blanch.

Most crypto miners are located in China, where most of the electricity comes from coal plants. Crypto mining involves using a computer to solve puzzles, after which the reward is small amounts of bitcoin. The computing power used in mining is rising every day as most internet users learn about cryptocurrency. If the energy used is not from green sources, this poses a danger to the climate with massive emissions. Colyer said miners are using renewable energy since it is cheaper, and players do their best to minimize the costs.

“The bitcoin algorithm is relentless in its drive for efficiency and cost reduction. It is built-in. There’s no stopping it. Every miner in the world is constantly looking forward to ways to take cost out of the production of bitcoin. And the most cost-effective energy is renewable energy,” explained Colyer. A report from Cambridge University revealed that thirty-nine percent of mining is powered by green energy.

Investors are concerned that bitcoin is going to take some time to go green. “As renewable energy production increases over the next twenty years, quantum computers reduce energy usage, and new, more efficient crypto-assets continue to emerge, the cryptocurrency space could eventually find ways to reduce its carbon footprint,” said Bank of America.

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