Not only does bitcoin represent a new era of currency, but it may also be good for the environment and support the global renewable energy industry. As an answer to the many skeptics who have negative views of bitcoin because they claim the alternative currency uses large amounts of electricity, new findings confirm the opposite–bitcoin is environmentally friendly.
According to the third installment of a biannual report put out by Coin Shares, a staggering 74% of bitcoin mining depends on renewable energy. The main source of energy fueling this mining is hydroelectric power, but wind technology also plays a vital role. China provides the bulk of green energy for bitcoin mining with North America, Norway, Sweden, Iceland, Iran, and Newfoundland providing most of the rest.
Although the report did state the fact that the bitcoin mining industry is “private and secretive” and that there may be a margin of error in the estimates, this margin is only plus or minus 10%.
Even with this margin of error, a vast majority of bitcoin mining would still be derived from renewable energy. In addition, the areas that are being used for bitcoin have traditionally been underutilized, and the bitcoin industry may actually make some renewable energy companies located in certain regions, such as Scandinavia, the Pacific Northwest, and China, more likely to be profitable, according to the report.
In some of these areas, the net return had previously been negative, but the economic stimulation created by bitcoin demand are turning these negative returns into profits. A trend that is facilitating this development is the reduction of the cost of mining hardware production and the increase in the efficiency of the mining process. The bitcoin and renewable energy industry could create mutual growth opportunities.
The report notes this connection, and states that the bitcoin industry is “more renewables-driven than almost every other large-scale industry in the world,” and the increase from November 2019 has been by an impressive 40 quintillion hashes per second. There was a slight dip at the end of last year, but a full recovery was due to the increased use of mining equipment which was becoming more profitable to run.
China is at the forefront of bitcoin development. The country reversed a ban on bitcoin in 2019, and since then, the country has been responsible for at least 60% of global bitcoin mining. Much of the hashrate comes from the Sichuan region. During the wet season, hydroelectric power is cheaper, especially in Sichuan with its four waterways. Bitcoin miners often move from one region to the other during various wet and dry seasons to seek the cheapest and best hydroelectric power.
The conclusion from this report is that renewable energy and bitcoin mining, taken together and separately, are increasingly profitable. With greater success in the industry, the demand to get into the mining industry is rising, with novice miners and veteran mining companies looking for novel ways to get the largest return on their investment and their mining processes. Companies such as Coinfly provide services and software that can be installed on RIGs and ASICs to sharpen innovation and improve efficiency.
It isn’t just the interest in bitcoin as a currency that is growing. Those who may find it difficult to comprehend the details of blockchain technology still may want to invest in bitcoin by getting involved in bitcoin mining with companies.
For instance, Coinfly provides equipment tuning and hardware optimization which conserves energy and optimizes hashrate output. Coins can be converted immediately into currency with Autopilot mode. One concern many miners have is that mining pools may not have transparency and can conceal data. The best services, such as Coinfly, feature mining pools that provide information openly, without concealment.
The increasing efficiency of mining and the environmentally-friendly aspects of bitcoin mining may encourage those who have had to be content with simply having and trading bitcoin to actually get involved in mining.
There are a number of advantages to mining over just buying bitcoin. Mining enables the miner to adopt a “hands-on” approach to accumulating bitcoin. Miners are rewarded with new bitcoin regularly and simply have to confirm transactions. Many like the visibility actual mining give them into the bitcoin process.
With concerns about sustainability growing around the world, the widespread use of renewable energy by the bitcoin industry is good news for many people who have thought about buying or mining bitcoin and crypto-currencies and are concerned about the environment. Not only does bitcoin make use of green energy sources, it can help make renewable energy companies more profitable, especially in areas where they were struggling. Both the bitcoin and renewable energy industries can grow in tandem with these new opportunities.