While bitcoin is energy-intensive, so-called “green” mining farms have mushroomed over the course of several years.
Each new bitcoin issued on the blockchain has an additional impact on the planet. Bitcoins are created in places called “mining farms” using the processing power of many machines and computers. However, all of these machines require a lot of electricity to operate. According to the Cambridge Bitcoin Electricity Network, bitcoin accounts for 23% of data center electricity consumption, or about 153 terawatt-hours per year.
58% of miners use renewable energy
Faced with this observation, more and more mining farms, accused of being highly polluting, are turning to green energy. There are more and more of them, for example, Marathon Digital Holdings or the Nantes company BigBlock Datacenter. According to the Bitcoin Mining Council, a council of bitcoin miners, 58.4% of miners will use a combination of renewable energy sources in 2022, although there are differences between some countries and some companies. According to the report, 44 companies in the sector, which accounts for 50% of total production, are increasingly using green energy to mine cryptocurrencies.
“This clearly puts bitcoin in an even stronger position than before in its status as a new store of value compared to gold,” Julien Maldonato, Deloitte partner in charge of the financial industry, explains to BFM Crypto.
For the latter, it is “extremely important” that the bitcoin mining sector continues its transition to “green” energy.
“This was the first criticism we made of bitcoin for being energy intensive if it allows green energy that cannot be stored (and would therefore be lost) to be converted into more efficient transaction security. bitcoin is a workable system,” he adds.
A trend that needs to rise
This green mining trend could intensify in the coming months. On the one hand, we are seeing interest in this topic from major players, for example, Telsa is planning to develop a solar-powered bitcoin mining farm. Moreover, some countries want to encourage companies to engage in green mining, such as El Salvador or, more recently, Uzbekistan, which just published a decree exempting green energy miners from taxes.
Another factor that could accelerate this trend is the economic context. “The transition to green is due to hydrocarbon prices, which disqualify players using coal, and this speeds up the game. This year, I bet we will have 85% green bitcoin,” Sebastien Goospiyo, boss, explains to BFM Crypto. “green” mining company BigBlock Datacenter, established in 2017. “For us, every miner who switches to coal is simply stupid,” he says. The company, whose mining farms are located in Kazakhstan and the Congo, is expected to have 6-7 sites by the end of the year.
His company is also gearing up to partner with the Central African Republic, which has just adopted bitcoin as legal tender, providing green mining utility to fund the country’s projects.
“We want to help them with their hydropower projects. The idea is to create “bitcoin bonds” in the Central African Republic to offer the community to buy tokens to fund the country’s hydroelectricity, profitability to be maintained through “green mining”. investor, there are fewer risks when financing a power plant through mining,” he explains.
Are mining farms green?
Faced with the emergence of all these “green” initiatives, the question may arise: are all “green” mining farms green?
“Mining farms have not yet been thoroughly tested to see if they are actually powered by green energy. This is because it is still a very recent phenomenon that historically Chinese fossil fuel mining farms have taken advantage of the expulsion from China. move close to clean energy sources. For these new ventures to mine false ads, it would be a disaster,” says Julien Maldonato.
For its part, BigBlock Datacenter also takes care of the recycling of mining machines. Indeed, mining farms face a lot of electronic waste (video cards, computers, etc.), as the Resources, Conservation, and Recycling study showed. “Our oldest machines will be 6 years old as long as they hold their ground. On the other hand, we store all the carcasses of dead cars and send them to South Africa for sorting, ”specifies Sebastian Goospiyo.