A green revolution in cryptocurrency mining? Industry responds to wake-up calls

After being hailed by many as a champion in the global digital asset market, Tesla CEO Elon Musk dropped a bomb on the crypto community in early May, contradicting the company’s decision to accept Bitcoin (BTC) as a means of payment for various auto sales . The reason given is that Bitcoin mining processes are too resource-intensive and not sustainable in the long term.

As expected, Musk became a sale almost overnight, especially among the Bitcoin maximalists who labeled him a sell-off and a market manipulator. Regardless of the name, the episode seems to put the spotlight on the energy-consuming aspect of the cryptocurrency mining industry. This is most clearly highlighted by the fact that recently more and more crypto companies are publicizing their moves to use greener energy alternatives.

Earlier this month, North American publicly traded bitcoin miner Bitfarms announced that it had managed to power almost 1.5% of the Bitcoin network with 99% clean energy. Not only that, the concept of climate-neutral exchange-traded funds (ETFs) is also rapidly gaining in importance worldwide. Many large investment management firms, including Toronto-based Ninepoint Partners LP, have taken steps to do just that.

Finally, BitMEX, a crypto derivatives trading platform, also recently announced its decision to be carbon neutral, while Marathon Digital Holdings, a US-based Bitcoin mining company, is hoping to hit the 70% carbon neutral goal in the near future .

Is green the only way out?

To get some insight into whether the mining industry is actually getting greener, Cointelegraph contacted Sam V. Tabar, chief strategy officer of Nasdaq-listed Bitcoin mining company Bit Digital and former head of capital strategy at Bank of America Merrill Lynch. In his view, the “green transition” in the mining world is happening quickly, adding:

“Many miners actively seek sustainable energy practices, especially publicly traded miners who want to maximize their profits for shareholders and stakeholders. We believe this is a holistic approach to improving our sustainability practices and reducing our environmental impact. “

When asked about his own company’s sustainability efforts, Tabar stressed that while most of Bit Digital’s energy, while it powers almost 2% of the global Bitcoin network, comes from central sources, climate neutral such as hydro, solar and other wind-based sources Technologies.

He also emphasized that as the industry becomes increasingly digitized, more and more companies will use the services of Environmental, Social and Governance (ESG) consultants to help improve their share of green electricity and other sustainability initiatives.

He added: “We are currently working with independent ESG advisor APEX. By measuring our sustainability and our mining footprint, we can develop goals for continuous improvement as we continuously move to 100% clean energy. “

Is Renewable Energy Really Cheaper?

Matt Hawkins, CEO of multi-algorithm CPU and GPU miner Cudo, announced his decision on the renewable and fossil fuel debate and told Cointelegraph that behind the scenes, several key players in the field have already started moving on to renewable energy making the move, which he believes is a positive step forward for the entire crypto industry. He added:

“The reality is that renewable energies are in many cases cheaper and therefore more attractive to mining farms, provided that the power source is stable and fluctuates free. Seasonality, like the dry season in China, where mining farms used to shift. “Operation to fossil fuel-powered plants during the dry season.”

Continuing the China theme, Hawkins suggested that the continued relocation of hash power out of the country should be seen as a great asset, especially when it comes to decentralizing the Bitcoin network. Tabar believes the ban on crypto-related activities is a hidden boon for US miners looking for innovative ways to find clean energy in the United States.

Is nuclear power an option worth considering?

While much of the talk about renewable energy has centered on solar and wind power, North American mining and storage company Compass Mining announced that it has signed a 20-year contract with fission startup Oklo, which will power the mining arm with 150 megawatts of energy if his small reactors come into operation in the next two to three years.

In addition, according to the US Energy Information Administration, nuclear reactors do not cause any air pollution during operation. In that regard, Compass CEO Whit Gibbs believes that mining costs for his company will “drop significantly” once his company switches to nuclear power. Additionally, Compass is also in talks with the crypto-friendly city of Miami about getting power from the Florida-based Turkey Point nuclear power plant.

Regarding the future use of nuclear power by other miners, Hawkins reiterated his belief that “cost efficiency matters,” adding that when the market is active and prices are rising, Bitcoin mining is profitable in most regions. Regardless of the electricity costs incurred. He added:

“Mining is a very intensive process and uses a lot of energy. The more clean and green energy sources that mining operations can use, the better for industry and our planet. The caveat here is to make sure you don’t just pull renewable energy from cities to power Bitcoin to run. “

Miners of the future

Earlier this month, Bitcoin saw its biggest decline in decades after China decided to completely ban its mining industry. Following this decision, the BTC difficulty rate was lowered significantly to 45%, which resulted in many mining operations being able to produce higher amounts of BTC at a lower cost per unit.

Since the ban, the move towards long-term sustainability has been extremely rapid, with Musk recently suggesting that the crypto industry may be on the way to a greener future, despite not rejecting Tesla’s decision to accept Bitcoin payments. Not only that, even recent data from the Cambridge Center for Alternative Finance shows that the amount of energy used to mine BTC has decreased.

Hence, time will tell what the future of Bitcoin mining will look like from now on, especially as more and more miners migrate to crypto-friendly countries in abundant renewable energy sources.