“UN report highlights the captivating correlation between Bitcoin’s soaring price and the escalating energy consumption for mining, shedding light on the sustainability challenges for the cryptocurrency revolution.”
A recent study conducted by the United Nations has shed light on the correlation between the price of Bitcoin (BTC) and the energy consumption of mining operations. The study evaluated the activities of 76 Bitcoin mining nations during the 2020-2021 period and found that the global Bitcoin mining network consumed a staggering 173.42 terawatt-hours of electricity. This increase in energy consumption was triggered by a 400% surge in Bitcoin’s price, which reached an all-time high of $69,000.
The UN report also revealed that at the time, fossil energy sources accounted for 67% of the electricity generated for Bitcoin mining. However, crypto entrepreneurs have taken steps to increase their reliance on green energy. Hydropower satisfied over 16% of the total electricity demand of the global Bitcoin mining network, while nuclear, solar, and wind energy sources provided 9%, 2%, and 5% respectively.
Despite these efforts, some members of the crypto community criticized the UN report for referencing a paper from 2018 that overestimated the carbon emission levels of Bitcoin mining rigs. It included unprofitable mining rigs in their analysis, leading to inaccurate conclusions. Nic Carter, a prominent figure in the crypto space, criticized the UN report for citing “completely fake academia in their papers.”
The report also highlighted that the top 10 Bitcoin mining nations, including China, the United States, Kazakhstan, and Russia, were responsible for the majority of the global carbon, water, and land footprint of Bitcoin.
However, there is hope for a greener future in the crypto industry. The global push for sustainable energy alternatives will help reduce the carbon footprint of Bitcoin and the overall crypto ecosystem. Companies like Genesis Digital Assets Limited have opened data centers powered by renewable energy sources, such as Sweden’s surplus of renewable energy.
Bitcoin mining equipment manufacturers are also contributing to the shift towards sustainability by developing energy-efficient hardware. Bitmain, for example, rolled out the Antminer S21, which focuses on efficiency. The industry is also exploring ways to locate mining operations in regions with a surplus of renewable energy, facilitating the decarbonization process.
As the crypto industry continues to evolve, it is essential to prioritize sustainable practices to minimize its impact on the environment. By embracing renewable energy sources and investing in energy-efficient technology, the industry can work towards a more environmentally friendly future.