Mining, the Achilles heel of Bitcoin, seems like a constant problem in the world of crypto. It comes as no surprise that energy-draining mining needs a rapid transition to a more sustainable direction. This is done by optimizing bitcoin mining on key fronts such as opting for greener energy sources, increasing the mining efficiency, researching new ways for development, and carbon offsetting. So, what are the latest key events in enhancing mining sustainability?
Bitcoin mining in 2023
From a climate perspective, 2023 started positively, as Bitcoin’s network emissions are declining despite increasing hash rate. According to researcher Daniel Batten, Bitcoin mining currently utilizes 52.6% sustainable energy. Improvements tied to specific geographic locations such as China and Kazakhstan lay at the basis of these developments.
Case China: what happened after the mining ban?
China and cryptocurrencies have a long and strained relationship, as China banned crypto mining in 2021. This is noteworthy because the country accounted for more than 75% of the global BTC hash rate before this ban.
Despite this dead end of mining, these regulations have helped to steer the mining processes in a new direction. Perhaps a better direction than before. Whereas only approx 40% of mining in China was sustainable, the current 50% of sustainable global mining is a step up. So how did this happen?
5 reasons why China’s BTC mining improved sustainable mining
According to the researcher Daniel Batten, there are five reasons currently driving Bitcoin on a more sustainable path.
- Firstly, the new hash rate is coming almost entirely (with 91.3%) from sustainable energy sources.
- Secondly, all the retired hash rate is from fossil fuels. Therefore, when the increase in sustainable energy is viewed in light of this fact, the mining industry is undoubtedly moving in the right direction.
- Thirdly, more mining takes place in the US after the mining ban in China. The US has more sustainable mining practices than China, with 52.8% sustainable energy compared to the 41.6% in China prior.
- However, all these positive effects have not been entirely linear. After the mining ban in China, Kazakhstan was perceived as the mining heaven partly due to its rich coal resources. This was very counterproductive for the environment. To decelerate the energy-consuming mining, Kazakhstan tightened the crypto regulations forcing the hash rate down.
- Last, according to Batten, all on-grid 100%-electrified technologies have increased their sustainability by 2%. Even though the increase might seem marginal, it makes a difference on a grander scale and indicates movement in the right direction.
Although Bitcoin mining has earned a bad reputation, things are moving in the right directen. There is no denying much work has yet to be done to get Bitcoin lined up with the sustainability goals. The matter is urgent, and every push in the right direction is needed.
If your business needs guidance with greener energy solutions, our GRN Energy consultants are eager to help you find the best solutions!