Bitcoin, the world’s most valuable cryptocurrency, is going green, and the pace at which the network has reduced its carbon emissions in the past three years has been noted by climate activists. Nonetheless, how this could impact BTC prices and attract technology firms like Tesla, the electric automobile manufacturer, is yet to be seen.
Carbon Emission Associated With Bitcoin Miners Rapidly Falling
As of late May, on-chain data from Woonomic shared by Daniel Batten, a climate technology investor, and activist, noted that the amount of Carbon emission associated with Bitcoin mining has fallen by nearly 50% from 601g/kWh to 299g/kWh in three short years.
It should be observed that the Bitcoin hash rate and prices have been rising steadily during this time. In the last quarter of 2021, the Bitcoin price soared to as high as $69,000 before collapsing to below $16,000 in November 2022. Although prices have since recovered, soaring to as high as $31,000 in April 2023, the hash rate has been steadily rising over the years.
In proof-of-work networks like Bitcoin and Litecoin, the hash rate relays the computing power dedicated to the network in real time. It is a variable that makes the network secure and robust against third-party attacks, and can also be used to gauge the pace at which the Bitcoin platform consumes energy.
Miners channel computing power as “hash rate” to secure the Bitcoin network. They need this to verify transactions in exchange for network rewards. The more the hash rate, the higher the chance of earning a block and, thus, the 6.25 BTC every 10 minutes.
However, the tough competition for the block rewards has been partly blamed for environmental degradation and carbon emissions from miners. To stay competitive, Bitcoin miners have to operate gear that is energy-intensive. Critics have always maintained that electricity powering them is from coal and other non-renewable sources.
As of June 2, the Bitcoin Energy Consumption Index shows that 105.23 TWh powers Bitcoin. It is the same amount of electricity consumed by Kazakhstan. The resulting Carbon emission, they add, stands at 58.69 Mt CO2, comparable to that emitted by Libya.
However, data from the Bitcoin Mining Counsel, a group comprised of some of the largest BTC miners in the world, provides more insight into the cryptocurrency’s energy consumption after conducting a study on its members:
(…) the members of the BMC (Bitcoin Mining Council) and participants in the survey are currently utilizing electricity with a 63.8% sustainable power mix. Based on this data, the global bitcoin mining industry’s sustainable electricity mix has improved marginally to 58.9% and remains one of the most sustainable industries globally.
Will Green Mining Support BTC Prices?
In that sense, Woonomic data coincides that emissions have fallen drastically over the last three years. It has nearly halved to 299g/kWh, suggesting miners switched to greener energy sources to power their rigs.
Technology companies would likely consider adopting BTC as payment as carbon emissions fall. Earlier, Tesla reneged on their decision to accept BTC for payment, citing the impact of Bitcoin mining on the environment. With Carbon emissions decreasing, this could positively impact BTC as major entities worldwide will embrace the coin and network.