As Bitcoin’s prominence in the financial world has grown, one constant remains: the energy-intensive process of mining. In 2023, the energy consumed by Bitcoin mining equaled the carbon footprint of Poland, while some large-scale operations use as much electricity as a small city each day.
However, a recent study conducted by the Bitcoin Policy Institute examined potential solutions to reduce Bitcoin mining’s environmental impact. The report suggests that mining facilities could significantly cut carbon emissions by adjusting their operations to align with electrical grid demand.
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By operating during off-peak hours, when energy demand is lower, Bitcoin miners could potentially reduce 4.4 million tons of CO2 emissions annually.
“Bitcoin miners often tout their ability to turn their machines off whenever electrical grids are stressed, but until now, the extent of miner flexibility has not been independently substantiated,” the report’s authors wrote. “We gathered detailed power usage data from 10 bitcoin mining companies in the U.S. and Canada and found that they curtailed power usage between 5% and 31% of the time.”
This strategy could contribute to an emissions reduction equivalent to removing nearly a million gasoline-powered cars from the road. This would work by leveraging Bitcoin mining’s growing reliance on renewable energy sources. Currently, more than half of Bitcoin mining, about 54.5%, is powered by clean energy such as solar and wind.
Because renewable energy production is not constant, as it depends on optimal solar or wind conditions, this creates a challenge when renewable power generation exceeds demand. The excess energy often goes to waste unless stored, both of which can be costly.
Off-peak Bitcoin mining offers an alternative by using this surplus energy that would otherwise be discarded. The study’s policy recommendations section says working with grid operators could be a cost-effective and environmentally friendly option for both miners and energy grids.
Jack Aylmer
AS BITCOINS ROLE HAS CHANGED IN THE FINANCIAL WORLD OVER THE YEARS – ONE THING HAS REMAINED CONSTANT:
THE PROCESS OF MINING IT – REQUIRES A LOT OF ENERGY.
LAST YEAR, THE ELECTRICITY NEEDED TO POWER THE MINING OF BITCOIN RESULTED IN ABOUT THE SAME CARBON FOOTPRINT AS THE NATION OF POLAND.
IN SOME CASES, LARGE SCALE CRYPTOCURRENCY MINING OPERATIONS CAN USE UP A SMALL CITY’S WORTH OF ELECTRICITY EVERY DAY.
BUT A RECENT STUDY BY THE BITCOIN POLICY INSTITUTE IS LOOKING AT WAYS TO MAKE THIS PROCESS LESS ENERGY INTENSIVE.
THEY CLAIM THAT IF MINING FACILITIES ADAPT THEIR ELECTRICAL USE BASED ON GRID DEMAND-
OPERATING DURING OFF-PEAK HOURS, THEY CAN CUT DOWN ON MILLIONS OF TONS OF CO2 ANNUALLY.
THE REPORT FOUND THIS STRATEGY COULD HELP CONTRIBUTE TO AN EMISSIONS REDUCTION EQUIVALENT TO TAKING ALMOST A MILLION GAS POWERED CARS OFF THE ROAD.
THIS WORKS BECAUSE OF THE INDUSTRY’S RELIANCE ON RENEWABLE POWER.
MORE THAN HALF OF BITCOIN MINING IS NOW POWERED BY CLEAN ENERGY SOURCES.
BUT RENEWABLES DON’T PRODUCE ELECTRICITY AROUND THE CLOCK, THEY’RE LIMITED TO WHEN SOLAR OR WIND CONDITIONS ARE OPTIMAL TO DO SO.
WHEN THAT DOESN’T LINE UP WITH WHEN PEOPLE NEED POWER – TWO OPTIONS ARE LEFT FOR THAT EXCESS ENERGY:
STORE IT OR GET RID OF IT. BOTH OF WHICH CAN BE COSTLY.
THAT’S WHERE OFF-PEAK BITCOIN MINING COMES IN AS A USEFUL ALTERNATIVE.
POWERING ITSELF OFF THAT EXCESS ELECTRICITY FROM RENEWABLES WHICH LIKELY WOULD’VE BEEN THROWN OUT ANYWAYS.
PRESENTING A WAY FOR BITCOIN MINING TO BE MORE ENVIRONMENTALLY FRIENDLY WHILE STAYING FINANCIALLY VIABLE.
JACK AYLMER – STRAIGHT ARROW NEWS.
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