- Debunking the Myth of Coal-Dominated Energy Consumption of Cambridge
- Revisiting Bitcoin’s Energy Sources and the Rising Role of Hydro and Wind Power
In earlier research, the Cambridge Centre for Alternative Finance (CCAF) claimed that coal was the primary energy source for the Bitcoin network which is proved incorrect by Daniel Batten, ClimateTech Investor, Climate Activist and a ESG Analyst.
In February 2023’s Bitcoin magazine, Daniel argued that the conclusion of Cambridge should be reconsidered since it was based on a dataset that excluded off-grid mining. Now, we will discuss more about this data and how Cambridge Centre for Alternative Finance (CCAF) did not consider all the data points therby making it inaccurate.
A Comprehensive View of Bitcoin’s Energy Sources
Dominance of Hydro Power
- Upon considering off-grid mining, hydro emerges as the leading energy source, accounting for 23% of all Bitcoin mining.
- Sustainable mining companies like OceanFalls, Blockfusion, Hut8, Iris, Sato, Terawulf, Statar/Lake Parime, Gridshare, and HPG are examples of those predominantly powered by hydro.
The Rising Role of Wind Power
- Wind power now represents almost 14% of all Bitcoin mining, thanks to companies such as Marathon and the high proportion of wind energy on the ERCOT grid.
- Almost 1/4 of the Bitcoin mining network is now located in ERCOT areas, contributing to wind power’s strong presence.
Comparing Bitcoin Mining and Electric Vehicles (EVs)
Differing Energy Sources and Emissions
- Unlike EVs, Bitcoin mining isn’t entirely dependent on the grid, resulting in different energy sources and emissions levels.
- Bitcoin mining utilizes a similar proportion of gas (21.14%) but a considerably lower amount of coal as an energy source (22.92%), making it 38% less coal-reliant than EVs.
Future Forecasts for Bitcoin’s Energy Mix
- The BEEST model indicates that the sustainable composition of the Bitcoin network is currently increasing at a rate of 6.2% per year.
- If the growth of sustainable energy continues, we can expect the relative percentages of coal, gas, and other fossil fuel sources in Bitcoin mining to decline.
Conclusion:
When the entire world wants to point fingers at Bitcoin, this report opens up door’s and debunks inaccurate reports from Cambridge.
Taking off-grid mining into account, it becomes evident that Bitcoin’s energy consumption is less dependent on coal than previously thought. With hydro and wind power playing increasingly significant roles, the future of Bitcoin mining appears to be on a greener trajectory.
Methodology as described in the blog
Suggested Reading
- Green Revolution in Cryptocurrency Mining: International Energy Agency Proposes Mandatory Carbon Emissions Reporting
- Former British MP Wants Bitcoin Banned For Energy Concerns
- Shell and BP back Blockchain platform that will boost trading in the energy industry
- Revolutionary TeraWulf Launches Nuclear-Powered Bitcoin Mining at the Nautilus Facility in Pennsylvania for 8000 crypto miners
- Power Ledger joins a key blockchain P2P energy trading pilot project in India
